SMSF Insurance
SMSF Insurance
SMSF Insurance refers to life, TPD, and income protection policies held within a Self-Managed Superannuation Fund (SMSF). These policies are purchased and owned by the fund rather than the individual, with premiums paid using super contributions. This structure can provide tax advantages, long-term affordability, and estate planning flexibility for members of the fund.
Whether you're a sole member of your SMSF or managing a fund for family members, it’s critical to ensure you have appropriate insurance in place to protect your wealth-building strategy and meet the fund’s legal obligations. Angelic Insurance provides general advice to help you compare insurer options and choose cover types that meet the compliance needs of your SMSF while protecting fund members and beneficiaries.
How It Works
SMSF trustees can purchase group insurance policies for members, ensuring they are protected in the event of death, disability, or loss of income. Premiums are paid directly from the SMSF balance, providing tax advantages and maintaining personal cash flow.
Select cover types held by your SMSF
You can hold Life Insurance, Total & Permanent Disability (TPD – “any occupation” definition only), and Income Protection within your SMSF. Trauma cover is not allowed under current legislation.
Fund pays the premiums
Premiums are paid from the SMSF account using superannuation contributions or fund assets reducing out-of-pocket costs for members.
Meet SIS Act compliance rules
All cover held in your SMSF must meet “condition of release” criteria under the Superannuation Industry (Supervision) Act 1993. Our brokers help ensure the cover aligns with these requirements.
Make a claim
If a member becomes disabled or passes away, a claim is made to the insurer. The benefit is paid to the fund, which then releases the money to the member or their beneficiary in line with superannuation law.
Benefit is taxed depending on circumstances
Tax on payouts depends on the member’s age, type of benefit, and beneficiary relationship. We recommend seeking financial advice on this aspect.
Why You Need It?
Protecting SMSF members ensures that their loved ones and dependents are financially secure. In case of illness, injury, or death, insurance prevents the fund from being depleted and helps members maintain their standard of living.
Member Protection
If a member becomes permanently disabled or passes away, insurance ensures the fund can continue to meet obligations or provide for dependants.
Estate Planning Tool
SMSF-held insurance can help with distributing wealth effectively, especially for families with adult children or business succession concerns.
Premiums Paid from Super Contributions
No need to dip into household budgets. Premiums are paid from super, helping preserve cash flow while building long-term wealth.
Satisfies Trustee Obligations
SMSF trustees are required to consider member insurance needs as part of the fund’s investment strategy. Having cover in place supports regulatory compliance.
Cost-Effective for High Earners
Holding insurance through your SMSF can be a tax-effective option for members in higher tax brackets or with complex financial structures.
How Angelic Insurance Can Help?
Angelic Insurance offers expert advice on selecting the right SMSF insurance products. We help trustees comply with regulatory requirements, choose the best coverage options, and ensure tax-efficient premium payments.
Compare SMSF-Compatible Policies
Not all insurers allow ownership structures through SMSFs. We help you find approved policies that work with your fund setup and member profiles.
Guidance on SIS Act Compliance
We provide general advice to ensure your cover meets “condition of release” rules so that claims are payable and legally compliant.
Integrate Cover into Your Investment Strategy
We help you structure cover amounts, benefit periods, and ownership types in alignment with your fund’s goals and risk appetite.
Work With Your Accountant or Adviser
We’re happy to liaise with your accountant or financial adviser to ensure your insurance fits seamlessly into your broader retirement strategy.
Ongoing Support and Reviews
As SMSFs grow or member circumstances change, we review your policies to ensure your cover remains compliant and effective.
Frequently Asked Questions
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