Life insurance from super and also from another provider

jrt2020 on 08/02/2019 - 09:32

Hi all
Need some suggestions

I currently have Mortage protect insurance which offers life insurance and they deduct around $130 per month

I also have super who deduct premium for life insurance every month and that’s also close to $100

Now my question is

If something happens , will both insurers provide insured amount I.e will the payout be 2 times?

My case both the insurers are same ( MLC)

Or am being fooled to pay 2 premiums but will be payed out once only ?

Anyway to cancel 1 of them if the above is true ?

Tried to contact them to get clarification and they say both are different policies and will both be paid but nothing in writing

Any experts who can advice ?

General Discussion

Comments

  • hj0809 on 08/02/2019 - 09:34
    +1

    Read the PDS. But yes often only one pays

  • chrisd262 on 08/02/2019 - 10:04

    Get rid of the one in Super - has always been regarded as useless.
    It is opt out option - some discussion recently re making it opt in only

    • AlloAllo on 08/02/2019 - 11:06

      As a generalisation, death cover inside super is every bit as good as death cover outside super. Definitely not regarded as useless if you need to leave a death benefit to support loved ones if you die.

    • Ryanek on 08/02/2019 - 11:19
      +3

      An advantage of having it in your super is that the premium is taken our of your funds (salary sacrifice) and not your taxable income.

    • imurgod on 08/02/2019 - 11:57

      Firstly, only one insurance policy will pay.

      Secondly, have your insurance through super reviewed urgently.

      I am in the game and had our guys review mine and a slight wording change made all the difference as to when and how they'll pay out.

      If you want to know more, please DM me, but it was a big difference in my case and ended up costing me less in premiums!

  • chrisd262 on 08/02/2019 - 10:06

    What are the benefits of life insurance - very popular on morning TV - has anyone ever received a payout?
    I suspect it is almost impossible?

    • derpdeder on 08/02/2019 - 10:50
      +6

      Are you asking if there are any dead people on this forum?

    • dcep on 08/02/2019 - 11:06

      life insurance payout when you're dead

    • AlloAllo on 08/02/2019 - 11:13
      +1

      I have life insurance to ensure that if I die this year there is cash available to help my wife pay off the mortgage on our home and give her some flexibility with work (she'd then be a single parent to two young kids which doesn't look easy) meaning with a bit of a cash buffer she wouldn't need to increase her current work hours for a good while.

      I sleep a little bit easier at night knowing this and am happy to pay for this.

    • imurgod on 08/02/2019 - 11:58

      That one you see on morning TV is awful cover. It's cheap and nasty.

      From memory they also do funeral and pet insurance (along with car, etc.).

      Check the PDS and you'll see the answer is pretty obvious.

    • brad1-8tsi on 08/02/2019 - 12:03
      +2

      Life insurance (all insurance) is to cover what your assets can't pay for in the event something goes wrong.

      I cancelled all my life policies a few years back when I realised that my assets exceeded my debts.

  • Seraphin7 on 08/02/2019 - 10:15
    +1

    Life insurance is arguably the most technical aspect of retail financial services. This is an area where, in my opinion, it really does pay to take some professional advice on board. This is not a DIY field.

    • GG57 on 08/02/2019 - 10:40

      I agree.
      My understanding was the Mortgage Protection Insurance was of more benefit to the mortgage provider, in that the benefit would be applied to the mortgage account first (and any additional benefit paid to the deceased estate).
      Whereas Super life insurance would be paid to the deceased estate.

      But get someone professional to confirm / deny.

  • Cheap Steve on 08/02/2019 - 10:59
    +1

    Most likely you will be paid out by both as they are 2 separate policies (even if same insurer).

    If you watch any murder-mystery TV, you will often find husbands take out multiple life covers on their wife just prior to an ill-fated boating/camping holiday. They usually bounce back from the grief pretty quickly with their new found insurance pay-outs and girlfriend.

    • bobbified on 08/02/2019 - 11:33

      Only lump sum insurances can be paid out multiple times based on the number of policies held.

      The maximum payable for an income stream is 75%+Super (84.5%), regardless of how many policies are held.

  • AlloAllo on 08/02/2019 - 11:04
    +1

    As a generalisation, if it is death, TPD or trauma cover, separate policies will generally BOTH pay on meeting the insured event (death or TPD). If it is Income Protection (sometimes known as salary continuance) one policy will generally offset the other (and you will only be paid once).

  • chrisd262 on 08/02/2019 - 11:13
    +2

    American system is quite different I think.
    I am a big cynic but I think insurance sold on morning TV - Funeral and Life are junk insurances?
    Especially those with a free prepaid Visa card etc. It is a suspicion that they are flogged so heavily and probably to the most vulnerable?

    Remember no 1 rule of any insurance policy is do whatever you can not to pay a claim!

    • MadeInPRC on 08/02/2019 - 11:54
      +1

      I am a big cynic but I think insurance sold on morning TV - Funeral and Life are junk insurances?

      Agreed. A lot of these will refuse to pay at claim time. Perhaps not on life insurance (as it's pretty hard to argue against someone being dead), but definitely on TPD, trauma and income protection policies. Especially the policies that promote 'no medical checks required' etc etc. The cover is near worthless. You might as well pay me the premiums to me! :D

      As others here have suggested, i would see a professional, if you are serious about protecting yourself and your family.

  • isthisreallife22 on 08/02/2019 - 11:42

    Arguably this is the most significant thing discussed by the Barefoot investor https://barefootinvestor.com/income-protection-finanically-o…

    He recommends upping life insurance inside super and cancelling all other life covers, as I recall

  • bobbified on 08/02/2019 - 12:04
    +1

    I currently have Mortage protect insurance which offers life insurance and they deduct around $130 per month

    I also have super who deduct premium for life insurance every month and that’s also close to $100

    To start wtih, you'll need to understand what type of cover each premium is paying for. You've mentioned that it's "life insurance", which is generally taken to mean either Death, TPD (Total and Permanent Disablement) or Trauma Cover.

    If it is Death, TPD or Trauma Cover, then yes, both policies can be paid out upon the triggering event.

    The income stream type insurance, also known as Salary Continuance, TTD (Total and Temporary Disablement) or Income Protection insurance, is limited to only one policy being paid out at a time to a maximum of 84.5% (75% + Super).

    However, "one policy payout at a time" doesn't mean you should simply go and cancel all-but-one of those policies. You would want to look into the benefits of each. Some policies may have "gaps" that the other policies cover. For example, one policy may have a waiting period of 90 days and the other pays out after 30 days. Or one policy is limited to a 2 year benefit period while another pays to age 65.

    If you're not sure, you may want to sit down and speak a planner or someone who can give you a non-technical explanation.

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