Hi all! Hope you're all having a lovely start to the weekend.
Just seeing if any thoughts on getting income protection - better through super or non-super?
If any recommendations of companies, definitely open to hear as well.
Income Protection - Super or Non-Super?
[Deactivated] on 19/05/2018 - 08:05
Comments
That's what I was thinking, but I imagine the premiums would be xx% more than super because of that.
Does YOUR super offering meet YOUR requirements? If not, get non-super.
Everyones circumstances are different so there is not one correct answer.
Personally, I have a separate policy, mainly because I'm the sole income earner in my family at the moment, have 3 mortgages, and cycle to work every day (dangerous activity that could potentially put me out of work for a long time).Thanks. Mind me asking which insurance company you chose and why?
Life Insurance is recommended be structured into Super, but Income Protection should be structured outside of Super. Better access better products and yes, tax deductible. Check out TAL, AIA … in general a balance between price and product, these two are pretty competitive.
Great thanks. Any thoughts on Noble Oak? They got Canstar 5 star ratings and seem competitive.
Better off doing through your super. Salary sacrificed super contributions. Pre tax dollars. any super contribtions only taxed at 15% rate.
After the changes to super insurance policies (legislated changes), the IP coverage within super is much less than before. Not suitable for most people who really require it. Also tax-deductible when paid outside of super.
changes to super insurance policies (legislated changes), the IP coverage within super is much less than before.
What's changed from before? I'm still seeing 75 and 84% (75% + super) policies.
IIRC, the policies don't go higher than a max total of percentages so that there's incentive to go back to work.
Outside super with agreed value and level premiums. IP policies outside super will be vastly superior to the IP policies offered inside super.
A lot of default IP policies in super run out after only 2 years, will be indemnity value and stepped premiums.
Ask an insurance broker. They'll know all the ins and outs specific to your circumstances. Wont charge a fee and will probably share the commission. Your not obliged to accept their advice/recommendation.
eg: It's FREE, and as an Ozbargainer should be on your radar.If you buy through Super, you reduce your future super payout.
Not if you contribute extra to cover the additional premium.
The price through super is often cheaper because it's a group policy. Depending on cash flow, some people prefer to have the premiums paid from their super account that so it doesn't come out of their immediate available cash. Tax-wise, they're the same.
When making a claim through super, both the insurer and the Trustee have to approve the claim (although the Trustee usually uses the insurer's definitions and assessment criteria). A standalone policy just requires the insurer's approval.
I personally leave mine in my super so I don't have to pay it out of my pocket right now and also because I'm a smoker - the policy I have doesn't charge more.
You can get super linked income protection that holds a portion outside super (ie agreed policy with better benefits) and the rest inside super. The good thing about this is that if cash flow is a problem you pay the majority through super and a little bit outside (which is tax deductible)
Depends on your occupation. Occupation-specific cover isn't available inside super, it would only pay out if you were unable to work in any capacity at all. You will be stuck in a cycle of dispute between lawyers over the exact t+c.
I have life insurance inside super (very cheap under $40 a month for $1.3m) because they can't argue the definition of death!Who do you use for the $1.3m at $40 a month? Do you have TPD insurance as well?
Hostplus for the life insurance. No TPD (couldn't see the point of it) but my IP outside of super has a TPD type lump sum payment if certain criteria are met anyway. IP costs me about 3% of annual pre-tax income!
They are NOT the same.
Through super, income protection is very restricted and post 30 days and usually must be fairly serious issue.
Normal income protection is much more flexible and easy to claim.
Its also tax deductible.Super as it’s much cheaper than non-super. In my case, it was about 75% cheaper when switched from non to super.
Ask your employer to pay for it at your next EBA discussions . Then they can claim it back on tax.
There doesn't seem to be any real wage rises the last few years . If you get it (sweet) then wait for the wage cycle to favor the workers again.You just have to remember that when any insurance policy held in superannuation pays out, it pays to your super account, not you personally. You then have to meet a condition of release to get the money out of super. This is why income protection doesn't make much sense inside super. For death and TPD, the event being insured and the superannuation conditions of release are much more aligned.
when any insurance policy held in superannuation pays out, it pays to your super account, not you personally.
Death and TPD are conditions of release.
This is why income protection doesn't make much sense inside super.
SCI insurance payments don't actually go into the super account. After approval from the insurer and Trustee, the period payments go to the member (not stuck in the super account) and they're free to spend it.
Glad you mentioned this.
You just have to remember that when any insurance policy held in superannuation pays out, it pays to your super account, not you personally. You then have to meet a condition of release to get the money out of super. This is why income protection doesn't make much sense inside super.
Not true. I once claimed income protection with Australian Super and they paid me to my bank account.
AIA is one of the worst according to those connected to the Royal commission. As someone fighting a claim since 2013, I can say NO to REST or AIA.
Both have been incompetent, foot-dragging nightmares. I was permanently injured, paid a bit, then they wanted their OT to look at me for a few minutes & say I was fine. I immediately disputed. They, then went on an all-out "let's see if we can make this go away" bent. Changeovers in who handled this claim have been so many I can't count. It's dragged for so long, GP's have moved on making things worse. They ask for forms they don't attach to emails, then pretend their email address changed (w/o notification?). Eventually, admitting how sh*t their response had been, and that things would be better from now on, then ignored further contact again, for another six weeks. Mostly, I imagine, as I requested our correspondence in writing from now on as their phone calls were even worse.
I'll give you a tip: private. Find review sites for the one you choose. Sit down w/whoever you choose and ask specific questions of how to claim. Ask to record the conversation- see what they say. Go to your GP if injured, immediately. Don't wait for them to suggest X-rays/ultrasound, & MRI— demand it. I'm being grilled as if I should have known & forced my GP/specialist to do tests, years ago now, that I would have no prior knowledge to request.
Insurance companies do NOT want to pay-out & will stall, stall, and stall some more. They are right bstrds!
PS: my initial payment went to my bank + some to super. So, the above is different for each policy/co., it seems. I think that streamlining this insurance would be a great first step to stopping these jerks from screwing people.
I find dispute arise more often as a result in different interpretations of the clauses. You say you are permanently injured? How so? Is it a Total Permanent Disability or is it Partial? Do you have TPD on your own occupation or is it any occupation?
Reason being you may consider yourself 'permanently injured' but clearly you have no problems with typing so if you are able to change your occupation to administration rather than manual labor (assuming) means you may not trigger a payout. That's also where the importance of Personal Advice and fully understanding your policy is important. No Insurers will not pay out every claim lodged, but based on what I have dealt with, they have paid 100% of legitimate claims.If you are still fighting a claim since 2013, have you referred to your PDS, contacted the Complaints Officer, lodged a complaint, and if it doesnt result to your satisfaction, contacted the Financial Services Ombudsman regarding this? I dare say if your claim has been ongoing since 2013, there is some other issues.
I'm with Qsuper. White collar worker. I pay all my premiums from within Super. All Pre-Tax dollars.
Premiums are:
Death Cover $3.36 a week for $500,000 cover
TPD $7.92 a week for $500,000 cover
Income Protection for 87.75% of salary - Maximum Cover 3 years - Premium is 0.847% of salary.Wow cheap prices. I pay a lot more as a non-smoker white collar worker, although I’m 52 years old
Always outside super if cashflow permits. First it’s all deductible. Most importantly in the event of claim you don’t need to wait for the trustees of your superfund to meet up and make a call on whether your payout meets a condition of release (SIS Act). This is another hurdle and can delay payment to you. Cheap premiums shouldn’t be the driving force of your decision. Cheap isn’t better. They could have varying definitions of temporary incapacity and their claims process can be cumbersome. Those who’ve made comments about AIA etc being terrible, well I think the question you got to ask yourself was the cover default through some industry fund where AIA was the underwriter? As those policies are massively different to the covers if you go directly to AIA. And the price difference proves that. I’m saying this as I’m a financial adviser
@Luv2spend: Can you please PM me? I'm interested in hearing your thoughts about this (also, your comment on my forum topic about accessing AIA Vitality through Super was unpublished before I could see it, so I'm interested to hear what you've said).
Outside of super it's tax deductible