Disclaimer: You cannot compare superannuation or income protection through superannuation on our service. However, you can compare standalone income protection policies.
You might be surprised to learn that income protection insurance is among the many features of superannuation. In fact, some super funds provide you with income protection automatically, so you might be paying for this insurance from your super account without even knowing about it.
Income protection insurance pays a monthly benefit if you’re unable to work due to a sickness or injury. For a period of time (e.g. 5 years or you until you turn 65) referred to as your benefit period, you’ll receive a benefit payment that can replace a percentage of your pre-disablement income and allow you to recover without having to worry about rushing back to work.
However, before deciding on this type of insurance, consider which is best for you: income protection through your superannuation fund or a standalone policy?
To help you answer this, here is our income protection insurance guide to help you understand what superannuation with income protection insurance covers and its pros and cons.
Australian superannuation funds can offer income protection insurance as part of their default insurance plan. Your insurance premiums will be deducted from your super account balance. In return, you could be covered by not only income protection, but also:
Income protection through super offers a default level of cover to all super fund members, which means that everyone gets the same cover automatically. As a result, the income protection benefits you receive from your super fund are quite basic. It’s often cheaper but covers you in fewer instances due to it not considering individual circumstances.
Alternatively, when you apply for standalone income protection through an insurance provider, they will assess a range of factors (e.g. your health, choice of career) to determine your risk profile and eligibility for income protection insurance. These variables will be used to come up with a more comprehensive level of cover and a policy more tailored to your circumstances. For the full list of factors that determine your risk profile, refer to the relevant Product Disclosure Statement (PDS).
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Policies may vary between health funds so make sure you check the relevant policy brochure for a full list of inclusions, exclusions limits, benefits and restrictions.
When choosing between a standalone policy or super income protection, there are a few variables to consider. Ask yourself:
Also, consider the pros and cons listed above and how they pertain to your situation when deciding whether to get a standalone policy or one through your super.
Income protection through super is usually only a basic level of cover. However, you can contact your superannuation provider and ask them to increase your level of cover. Please be aware that your request will be met with more paperwork, including a medical questionnaire, before your fund approves your increase. It’s also important to note that increasing the level of cover increases the premiums.
Alternatively, if you find your superannuation’s income protection policy insufficient, you could start searching for a standalone policy.
Yes. However, this wouldn’t be very practical as most payouts are capped at 70% of your income across all policies, not per policy. Therefore, having multiple policies could equal a lot of money wasted on premiums. It’s generally wise to choose one comprehensive solution that suits your situation, not two or more.
If you’ve decided to take out standalone cover, you can remove income protection from your superannuation. Go to your super fund’s website, log into your member’s portal and follow the prompts. Alternatively, give your super fund a call.
Standalone income protection has a lot more to offer than the cover typically found in superannuation policies, such as:
It’s always helpful to compare your options to ensure you find a great policy. If you want to weigh up multiple standalone policies from some of Australia’s most trusted insurance providers, you’re already in the right spot!
Our income protection comparison service offers a seamless way to find a policy that offers value for money and peace of mind.