The General Rule

Generally, if you own a policy personally (outside of super) and the benefit is paid to a financial dependent (like a spouse), it is tax-free. However, when insurance is held inside a superannuation fund or for business purposes, the rules change.

The “Super” Trap: A Concrete Example

Imagine David. David has $500,000 of Life Insurance held inside his SMSF. He hasn’t updated his binding nomination in years, and the payout goes to his adult son, Chris, who is financially independent.

Because Chris is not a “tax dependent” under law, the payout could attract a tax rate of up to 30% (plus Medicare Levy). Instead of $500,000, Chris might only receive $350,000. If David had known this, he might have increased his cover amount to offset the tax or structured the ownership differently.

Quick Reference Guide: Personal Insurance

Insurance for Business Structures

When insurance is owned by a company or a trust for business purposes, the tax treatment depends on the purpose of the policy.

1. Key Person Insurance

This protects a business against the loss of a “key” employee whose absence would cause financial strain.

• Revenue Purpose: If the cover is to replace lost profits, premiums are generally tax-deductible, but the payout is taxed as business income.
• Capital Purpose: If the cover is to repay a business debt, premiums are usually not deductible, but the payout is typically tax-free (though Capital Gains Tax may apply in certain company structures).

2. Buy-Sell Agreements (Business Succession)

These policies fund the “buy-out” of a partner’s share if they pass away or become disabled.

• A Concrete Example: Sarah and Mark own an engineering firm worth $2M. They have a Buy-Sell agreement funded by $1M life policies on each other. If Sarah passes away, the $1M insurance payout goes to her family, and her share of the business is transferred to Mark.
• The Tax Catch: If the company owns these policies, the payout could be seen as a dividend or attract Capital Gains Tax (CGT). Most specialists recommend “self-ownership” or specific trust structures to ensure the money ends up in the right hands without a massive tax bill.

Get Expert Guidance

Understanding the intersection of tax law and insurance is vital to ensuring your loved ones or business partners aren’t left with an unexpected tax bill. Because every situation is unique, it is important to get the structure right from the start.

Are you confused about whether to hold cover in super? Read our guide on Super vs Non-Super Insurance for more details.

Ready to ensure your cover is structured correctly? Click here to make an appointment with one of our specialists today or call us on (07) 3064 0413 to discuss your needs.

General Advice Warning: This information is general in nature and does not take into account your personal objectives, financial situation, or needs. Tax laws, particularly regarding SMSFs and business insurance, are complex. We strongly recommend seeking professional tax and legal advice before establishing these structures.

The “Bucket” Analogy

Think of a Linked Policy as one big bucket of money. If you have $500,000 in Life Cover and $200,000 in TPD linked to it, your total available “pool” is $500,000.

• If you claim $200,000 for a TPD event, that money is taken out of the bucket.
• Your remaining Life Insurance is reduced to $300,000.

A Standalone Policy is like having separate buckets for each type of cover. Claiming from your TPD “bucket” has no impact on the balance of your Life Insurance “bucket.”

Why Choose One Over the Other?

Linked Cover: Generally a lower premium because the insurer’s total risk is capped at the highest benefit amount. It’s a popular choice for families looking to maximise cover while managing a budget.

Standalone Cover: Provides more certainty. You pay more in premiums, but you know that a major illness claim won’t “eat into” the payout intended for your family in the event of your death.

The “Reset Buttons”: Buy-back and Reinstatement

If you choose a linked structure, you can add “reset” features to protect your remaining cover:

Life Insurance Buy-back: If a TPD or Trauma claim reduces your Life Cover, this option allows you to “buy back” the lost amount—usually 12 months after the claim—without needing further health assessments.

Trauma Reinstatement: If you claim for a specific illness (like a heart attack), your Trauma cover typically ends. Reinstatement allows you to restart the policy for future unrelated conditions (like cancer) after a waiting period.

How Trauma Reinstatement Works

Normally, Trauma insurance is a “one-and-done” policy. If you claim for a heart attack, the policy ends. With a Reinstatement option, you can restore your cover (usually after 12 months), but there is a major condition: you generally cannot claim for the same condition or a related condition twice.

Insurer’s typically group illnesses into categories (e.g., Cancer, Heart/Circulatory, Nervous System). If you reinstate your policy after a Heart Attack:

Covered: A future claim for an unrelated condition, such as Cancer.

Not Covered: A second heart attack or a related event like a stroke, as these fall under the same cardiovascular category.

Concrete Example: Sarah’s Recovery

Sarah has a linked policy: $1,000,000 Life Cover and $200,000 Trauma Cover with both Buy-back and Reinstatement options.

The Event: Sarah suffers a stroke and claims her $200,000 Trauma benefit.

The Immediate Impact: Her Life Cover drops to $800,000 and her Trauma cover is exhausted.

12 Months Later: Sarah exercises her Buy-back to restore her Life Cover to $1,000,000. Simultaneously, her Trauma Reinstatement kicks in. She now has $200,000 of Trauma cover again.

The Result: If Sarah were to unfortunately be diagnosed with an unrelated cancer later in life, she could claim the $200,000 again.

Is Your Policy Structured for Your Needs?

Understanding these nuances ensures you aren’t left underinsured after a claim. Because every financial situation is different, getting the structure right is just as important as the amount of cover you choose.

Are you unsure if your current policies are linked or standalone? Click here to make an appointment with one of our specialists today or call us on (07) 3064 0413. We can review your existing cover and help you decide which structure best fits your lifestyle.

General Advice Warning: This information is general in nature and does not take into account your personal objectives, financial situation, or needs. Policy terms, definitions, and “buy-back” periods vary significantly between insurance providers. Always read the Product Disclosure Statement (PDS) before making a decision.

In reality this is not the case. Different providers operate very differently, and the differences can be very important for consumers—especially when it comes time to claim on a policy.

Let’s delineate the three main streams of insurance sellers, so as to arm you with more information in choosing your provider.

The first type we will look at is what’s known as direct insurance sellers. In this scenario you purchase directly from an insurance company without any intermediary advising you. You might do so on-line, or you might deal with a phone salesperson who works exclusively for that one company you have contacted.

Importantly direct insurance is not what is termed “medically underwritten” unlike retail insurance which we will look at later, and this can sometimes restrict what you can claim for.

Many people are attracted to purchasing a direct policy because of the apparent simplicity and ease of the process, but they should be very certain to read the product disclosure statement thoroughly from start to finish so they don’t get any untoward surprises come claim time. These PDS’s, can sometimes be dense documents to get through, written in a semi-legal language that is not to everyone’s liking. This is why many people turn to experts like the qualified insurance specialists we have on staff at SMFS Insurance Partners.

So, with direct cover be aware that, these types of policies often have built in exclusions and can also be more expensive than retail policies.

The next avenue of purchase is through a group provider—and this is exactly as the name would suggest. It is an umbrella arrangement where purchasers are grouped together by being employees of the same organisation or members of the same superannuation fund. Certain blanket assumptions may be made by the insurer around occupational risk, and a predicted general state of health of the group based on age and occupation.

This can mean that you find—unlike a retail policy, where you are providing detailed information about your life and health situation—the group policy does not reflect the detailed policy requirements you really need to be completely comfortable. However, if you have not been able to find approval for a retail policy, a group policy can definitely be a viable second option.

Two additional important considerations in regards to Group Insurance Policies are:

• Group cover generally expires at age 65, whereas retail cover can be accessed up until 99 years of age.
• Group policies are not automatically guaranteed to be renewed.

This of course leads us to retail insurance policies, the type our team at SMFS Insurance Partners most often deal with. In this scenario you sit down with a qualified consultant, who has access to a complete market place of insurance providers all effectively competing through SMFS Insurance Partners to be your insurance provider.

Yes absolutely we do take a bit of time in taking you through the questionnaire process regarding your lifestyle, occupation, and medical history—and we’re proud of this approach. Health, age and lifestyle are key factors in building a profile of you that helps us find the most appropriate insurer and policy or policies for you. We find that time well spent with you at this point, means we can nuance a policy more effectively to your needs and what is most important for you. In general, you want the most complete cover possible, for the budget you have allocated, and you want to minimise any untoward surprises arising during a claim.

Of course price is always an important consideration, and we will always make sure we provide you with the most competitive and cost-effective solution in this regard.

If you would like some more advice around what’s been detailed here, please feel free to contact one of our friendly informed SMFS Insurance Partners consultants on (07) 3064 0413, or contact us via the convenient messaging section on our website.

However, in with these advantages there are certain compliance obligations trustees of SMSF’s need to be aware of. In 2012 the federal government introduced new strong super obligations. Notable amongst these were that: “Trustees must regularly review the investment strategy of the fund.” And also make sure that: “This strategy adequately reflects changes to circumstances affecting the fund and its member/members.”

Why are these criteria important in regards life insurance? Well, because part of the governments mandate was that the investment strategy of a SMSF now has to include consideration as to the appropriateness of life insurance for fund members.

Let’s now take a look at the specific compliance obligations.

The overall investment strategy of the SMFS needs to be documented, a record kept for compliance, and this needs to include life insurance considerations. But this doesn’t in any way have to be an onerous or detailed task. At least twice a year, as part of a meetings minutes, a trustee just needs to record the process taken in considering life insurance and the reasons behind any decisions taken.

Now in stating this, trustees are not required by law to take out life insurance policies for members, but they do need to at least show that they have considered the appropriateness of this action. And not just life insurance should be included in this equation, also TPD (Total and Permanent Disability) as well as income protection.
So, let’s look at the types of events you can insure yourself against through a SMSF. There’s death, terminal medical conditions, permanent incapacity and temporary incapacity. And as mentioned earlier, the policies you might purchase are: death cover, any occupation total and permanent disability (TPD), as well as standard income protection policies.

Typically however, you cannot purchase comprehensive income protection policies, own occupation TPD, or trauma insurance (unless it is a continuation of benefits for a member that existed prior to 1 July 2014).

This selection of included or excluded insurance products is not solely arbitrary, but designed to adhere to specific conditions governing the release of payouts to SMSF’s. These conditions protect members and make sure that payouts from excluded insurance products do not remain trapped within a fund.

Then again, the advantages of having insurance running through your SMSF are that you can service the premium payments from the superannuation balance held in the fund. Additionally, since your super balance is an accumulation of pre-tax funds, you are also paying your premiums with money that has not yet been taxed. Also, typically income protection policies pay out approximately 75% of lost income, while if purchased through your SMSF, adhering to the correct conditions, they can replace 100% of lost income.

But when considering whether to buy insurance through you SMSF or not you need to consider every factor, including some disadvantages. You will be looking at a narrower range of products, you will be eating into your super balance, and there is a cap on how much extra pre-tax income you can put into a fund per year to try and replace funds lost through premium payments.

As you can see there’s a bit to consider. If you feel you would like more information around insurance and how it relates to your self-managed super fund, please feel free to contact our team here at SMSF Insurance Partners. Our representatives are available on (07) 30640413, or please use the Contact Us section of our website.

The stark reality is that if you were struck down with injury or illness, couldn’t work and keep generating cash flow, most of your business’s expenses would still need to be serviced. These are not limited to, but would most likely include:

• Staff salaries.
• Rent.
• Bills (including gas, electricity, cleaning, phone, internet and more.)
• Business loan repayments.
• Insurance premiums.
• Security costs.
• Equipment maintenance.
• Leases on vehicles, machinery, and equipment.
• Accounting fees.
• Auditing fees.
• Marketing, postage, printing, and stationary.

As you can see, once you start to itemise and add them up, day-to-day business expenses can be substantial.

Just as an income protection policy does an individual, a business expenses policy provides a regular source of income enabling a business to meet its overheads. Generally paid monthly to cover fixed business overheads it typically extends over a 12-month period.

What business insurance doesn’t cover is the cost of temporary employees like seasonal workers. It also won’t cover income taxes, or costs associated with buying new stock.

Of course, in weighing up whether your business needs business expenses insurance the questions you’re trying to answer are:

• Whether your business relies on just you, or a small number of other vital people to function?
• Does your business rely on generating consistent daily cash flow to cover its operating costs?
• Does your business rely on contractors providing services to it to keep generating cash flow?
• And ultimately, what are the businesses savings? Could it keep paying out overheads for an extended time without revenue coming in?

One thing to be aware of is that business expenses insurance is not the same as business interruption insurance, which covers your business if it is unable to operate due to an extraordinary event like a fire, or flood. Or indeed being shut down under government mandate by a pandemic such as Co-vid19.

Business expenses insurance covers you, if you are not able to continue to operate your business due to illness or injury. So, consider carefully taking out cover if you are:

• A small business.
• A partnership with 5 or less partners.
• A sole trader.
• A business that relies on services provided to generate cashflow, such as consultants, contractors and professionals.

Your business might have been moving along fine, only to be threatened by yourself becoming sick or injured. If you don’t have the resources behind you to keep paying the business costs it can be stressful and you could ultimately lose the business—and all the hard work you’ve put into building it. However, if you could have expenses of, for example up to $60,000 a month covered for 12 months, you might avoid all of the above disasters and your policy may well cover 100% of your business costs.

Additionally, the cost of premiums for this type of policy are tax deductible, and can also be waived when you are on a claim. Plus, your cover generally automatically increases in line with the consumer price index.

Premium options

You need to check the individual guidelines of any policy you are considering taking out, but you may find you can choose to pay your premiums as:

• Stepped Premiums – as you get older, your insurance premium will vary each year, your benefits remain the same.

Or

• Level Premiums– your insurance premium does not go up by age-related increases, your benefits remain the same.

As you can see there’s a fair bit to take into consideration if you’ve been thinking about business expenses insurance. If you would like to investigate your options further, you can talk to one of our consultants at SMFS Insurance Partners. Just call us on (07) 3064 0413 or utilise the handy contact us section on our website.

• Age – the older you are, typically the more you pay for insurance.
• Gender – females typically pay less for life insurance, but due to claim rates, more for income protection.
• The state you live in – different states have different stamp duty rates which are passed on to clients.
• Occupation – not so important for life insurance, but a major factor in income protection.

It’s best to get quotes for a range of companies

At SMFIP we specialise in providing quotes from a range of companies. We believe this is important, as some insurance companies are looking for customers in a particular niche, for example, white collar females in their 30s, and often change the markets they are targeting. For this same reason, premiums will also vary from company to company, even for the same amount of cover. That is why we feel it is important for a company like ours to provide you with a full comparison of insurers to review. We also encourage you to touch base with us at least every few years to make sure your policy is still competitive.

Different policy terms, conditions, and features

Not all insurers have the same terms and conditions or features within their policies. In fact they can vary widely and sometimes this can make it hard for customers to make like for like comparisons when choosing amongst insurers that offer comparable premiums and cover levels. It is often the case that a particular benefit can be of little value to one client but essential to another. For example, a needle stick benefit for a GP is likely going to be a must, but not so valuable for an economist.

At SMFS Insurance Partners, on behalf of our clients, we deal with all the major players in the Australian Insurance landscape. In sourcing an appropriate policy or policies for a client we might review offerings from: Met Life, CommInsure, Clear View, One Path, BT, TAL, Zurich, AIA and NEOS just to mention a few. Our insurance consultants are trained in navigating what can be a labyrinth of detail, to find the best cover for the lowest premium. but this can be a daunting process for the layperson.

Medical insurance loadings

In Australia, premiums might also vary according to your medical circumstances. In fact, in some instances cover might be declined outright. Then there is also the question of what is known as loadings and exclusions. Due to medical considerations, if cover is offered, you might attract a loading of between 50% to 150% on top of your premium.

Life insurance loadings

For life insurance, cover is generally not offered with exclusions, (except all life insurance policies come with a suicide or self-harm exclusion in the first 13 months of a customer taking out a policy). If you have medical issues cover is generally offered with loadings or can be declined. The most common loadings are 50%, 100% and 150%, although we have seen loadings up to 300%. Sometimes insurance companies will put a dollar amount per thousand dollars of cover. For example, if you have a two dollar per thousand loading that means for one million in cover you will be paying two thousand per year more for your cover. We have seen loadings up to six dollars per thousand in rare circumstances for a series of medical conditions.

Income protection, trauma and TPD loadings and exclusions

Income protection, trauma and TPD can all be assessed with loadings or exclusions and sometimes you have the choice on whether to accept a loading or take an exclusion.   The most typical type of loading relates to BMI (body mass index). Generally speaking, a BMI less than thirty will not attract a loading. A BMI in the range of thirty to thirty five can attract a loading or be at standard rates.  Above thirty five BMI there is generally a loading that kicks in, but not always. At SMFS Insurance Partners we know how to navigate the various insurance companies to get the right results for you, as some insurance companies take a more holistic view of your medical condition.

Exclusions are generally comprised of various cases, medical conditions or life activities that cannot be claimed on. The most common forms of medical exclusions include mental health and muscular skeletal (e.g., back exclusions).

Life insurance companies also often won’t cover any death or injuries that arise out of a person being involved in any illegal activity. Even behaving unwisely could see exclusions levelled when a claim is made. These exclusions might include driving dangerously, not adhering to rules or following warnings when using equipment or failing to seek treatment for a medical condition that eventually turned out to be career ending or life threatening. You must bear in mind always that insurance companies are commercial institutions and make all their decisions around remaining commercially viable.

Having said that, because the commercial marketplace, and the forces that govern it are constantly changing, so are insurance premiums, policy loadings and exclusions from company to company. For this reason, it is always prudent to do a comparison with us when you are either sourcing a new policy or renewing an existing policy. Our highly trained insurance consultants at SMFS Insurance Partners deal with these changing circumstances every day.

As you can see there can be important detail around premium levels, exclusions, and loadings when looking at any life insurance, income protection, trauma Cover and total and permanent disability cover. It is important to gather information at every opportunity in understanding your needs and policies that might be offered to you. Our team at SMFS Insurance Partners are on hand and only a phone call away, available to give you no cost advice around your insurance requirements. We’re proud to say we’ve built our reputation on our ability to firstly understand our clients’ individual needs, then provide relevant, appropriate, price effective solutions. Contact one of our team on (07) 3064 0413 or leave a message on the contact us section of our website.

There are plusses and minuses with having your insurance paid within a super fund versus having it outside a super fund, and then there is also the extra element of what’s known as super-link to consider—which allows you to link a policy within super to a policy outside of super.

Types of insurance in super

Historically, the main type of product offered through superannuation has been group cover. This is a default cover that superannuation funds typically provide and can be limited in terms of cover amounts and policy options but has typically been cheaper than retail policies. Over the past decade, it has become increasingly popular for retail insurance products to be purchased through super. These products allow for greater flexibility, higher claim payout rates and a wider variety of coverage options. At SMFS Insurance Partners we specialise in retail policies utilising Australia’s major insurance providers.

Tax benefits inside of superannuation

Firstly, just focusing on the tax concession side which is an important consideration for many people. Life insurance and TPD taken out through super attract a 15% tax benefit, there are no tax benefits if taken outside of super. Additionally, income protection taken out through super is 15% tax deductable. However, income protection is generally claimable at your marginal tax rate if taken outside of super. Based on 2021 tax rates, for those earning more than $18,201 the tax benefit is generally better for income protection outside of super.

Typically, when a life insurance policy is paid out to a dependent there are no tax implications on that payout, however, TPD if withdrawn from super is subject to withdrawal taxes when withdrawn prior to the preservation age. The rate of tax varies according to a complex formula which considers years to retirement and typically varies from 1 to 18 per cent.  Income protection payments, once released to you, are treated as assessable income irrespective of whether you took the policy out, inside or outside of super.

Saving cash flow paid through super

Additionally, paying for your insurance through your super fund does mean you are using pre -tax dollars to pay it. A positive of this is that it can free up your normal disposable income to be used for other purposes. With life insurance within super, you may find that your insurance premiums are lower, but you may also find that the benefits paid may also be lower, and that you can’t source the same variety of policies you find outside of super. And of course, you if you have life insurance within super, you will need to make what’s known as a valid binding nomination, to say who any payout goes to.

The Super-link option

But it’s not just as simple as making a choice between having your life insurance within or outside of a super fund. There’s also superlink, which means you pay a portion of your premiums outside of super and a portion within. This helps add back some policy features that you might have lost, due to restrictions, if you ran all your insurance only through super.

How does super-link work?

Now let’s look briefly at why you might want to super-link your insurance policies, also sometimes referred to a flex-linking. The main reason is that this allows you to gain all the benefits of TPD and income protection that might be unavailable if you were funding everything through super only.

Especially important with regards to TPD and an own occupation policy. Meaning if you cannot work in the occupation you were doing when you were injured, you can claim. As opposed to an any occupation policy, which means you cannot claim if you can still work in any occupation you have experience, education or training in. Importantly, if funding your policy entirely through super you cannot hold an own occupation policy.

With income protection there are also many benefits that can be added back with super-link. These might include specified injury benefits, needle stick cover and many more.

So, the main advantages of super-linking are that, it keeps premium payments out of your own pocket lower, because they’re partly paid from your super balance, it allows you more comprehensive coverage regarding policies and you still achieve some discounts because premiums paid through super are eligible for a 15% rebate. For more information and help around these types of decisions please contact SMFS Insurance Partners on (07) 3064 0413 or contact us via the convenient messaging section on our website.

A general rule of thumb might be that over an eight-to-ten-year lifespan of an insurance policy you would roughly break even with each different structure, but over a longer term you might be significantly better off with a Level premium policy.

A couple of caveats on this are that even if you have a Level premium structured policy, prices can still increase if your insurance company increases the price of its insurance. Plus, your cover amounts can increase with inflation and premium amounts increase as cover increases.

But even in taking these into account, with Level premiums, the largest variable, age influenced premium increases, is locked in at the time you take out your policy.

Let’s now look at a price example, provided by an insurance consultant at SMFS Insurance Partners, to give some greater clarity around this discussion.

The total amount of cover is not detailed here as the example is designed to show an indicative difference between two types of premiums, Stepped and Level.

William, is a 36-year-old father of one who is taking out life insurance for the first time, mainly with the thought of being able to cover the mortgage on the family home for his family, in the event of anything untoward. Upon investigation with a consultant, he notices that Level premiums initially cost $77.70 per month as opposed to Stepped premiums which initially cost only $44.87 per month. Well, if his investigation stopped there, the choice would be simple.

But upon closer examination he can see from the chart below that if he chooses Stepped premiums, although more cost-effective now, they would exceed Level premiums by the time he is 46—that’s only ten years away! Furthermore, on a cumulative total basis, the amount he would spend on Stepped premiums would exceed the total amount he would spend on Level premiums by the age of 52, that gives food for thought. Hopefully at that age, William would still have a long life ahead of him, and would undoubtably have ongoing insurance needs. He now realises he needs to make sure he is considering all likely premium scenarios, and make the right choice for his financial situation and his families security needs.

Can you switch from Stepped to Level premiums?

Well, yes you can, but it involves cancelling your existing cover and taking out a brand new policy. Also be aware that, especially the longer you leave it, you will never catch up to what you would have paid with Level premiums had you started on them in the first place. Additionally, if you have had a medical condition between taking out your existing cover and trying to change to Level premiums, cover may not be offered on the same terms or might not even be offered at all, so there are significant risks involved in trying to convert to a Level premium structure down the track.

Now, as with all information published on our website, the information and examples here are of a general nature only.

Your life situation is unique to you, and likely your insurance requirements, around the choice of Stepped or Level premiums are too.

Our insurance consultants at SMFS Insurance Partners can give you important information around your options. We also draw upon a competitive, wide ranging platform of insurance providers to save you time and energy in achieving the best results possible. Call us today on (07) 3064 0413 or leave us a message using the convenient contact us page on our website.

• A completed claim form.
• Details about the medical condition concerned, including diagnosis and a record of any medical appointments.
• Copies of any medical certificates, reports or tests.
• In the event of someone’s death, you will need a copy of the death certificate.

There are a number of things you can do to make the claims process as simple and stress free as possible. Check over your policy documentation, as insurance policies and claiming procedures can vary greatly between companies. Make sure you are aware of your particular insurers policies and have the information they will request on hand before you contact them.
Your insurer may require you to supply various types of documentation and they may also need you to attend independent medical assessments. Being organised and making yourself available during this process means you will speed up the time in which you will receive your benefits.

Now let’s address some frequently asked questions around claims.

• Although it is a good idea to put in your claim as soon as possible, there is no time limit on claiming for policies such as life insurance, income protection, TPD or Trauma. So don’t be concerned if for some reason you can’t act immediately.
• It is unusual for a life insurance company to deny a claim, but yes it does happen from time to time. Usually this will be because a customer has misrepresented information during the application process, and the manner of death has shown they presented a far greater risk in terms of their actual occupation, health or lifestyle.
• Do insurance companies investigate claims? Yes, of course they do. And in doing this they may look at medical records, and any other documentation that shows a customer has misrepresented, or been dishonest in making their initial application. Even if you think an application may be rejected, or a higher premium will be asked for, be one hundred percent honest and upfront about your medical history, lifestyle, occupation, and indeed in your answers to any questions during the application process. In doing so you will be saving yourself potential headaches going forward.
• A claim can also be denied if a policy lapses. So always make sure you are up to date with your insurance renewals. But, and this is an important point, if your cover was still current at the time of the claimable event, you would still be able to make a claim.

Interestingly in 2016 ASIC (the Australian Securities and Investments), produced report 498 entitled: Life Insurance Claims—an industry Review. This report identified that, on average, industry wide, when a decision had been made, 90% of claims were paid in the first instance, and this rose to 96% for death claims.

The report also found that: “For consumers, the intrinsic value of an insurance product is in the ability to make a successful claim when an insured event occurs. Not being able to successfully claim on life insurance in these circumstances can be financially devastating for the consumer and/or their family.”

Additionally, it was determined that decline rates were highest for TPD (Total and Permanent Disability) and Trauma Cover, and policies declined were highest for policies that had been distributed directly, for example, on a non-advised basis. Policies that are non-advised are typically direct insurance or group insurance products.

Although we provide general advice at SMSF Insurance Partners. The types of products we specialise in are retail insurance policies. Meaning we find out everything we need to know about you and your occupational and income details during the application phase. We also collect all the necessary medical information from you and we fully disclose all aspects of any policies you are purchasing, including terms and conditions, exclusions, and loadings. Our aim is to make sure you have adequate cover and keep any surprises to an absolute minimum come claim time. Our attitude is that customers diligently pay their insurance policies and maintain adequate levels of cover, often over many years—the last thing they should have to deal with is any untoward difficulties in the advent of a claim.

If you would like us to help you please contact one of our team on (07) 3064 0413, or leave a message on the Contact Us section of our website.