Death Cover (Life Insurance)

Superannuation death cover, also known as life insurance within your super fund, acts as a safety net for your loved ones in the unfortunate event of your passing. It provides a financial cushion, ensuring your family’s well-being isn’t jeopardized by your absence. Let’s delve deeper into how death cover works and the benefits it offers.

Peace of Mind Through Financial Support:

Death cover pays a lump sum benefit to your nominated beneficiaries after your passing. These beneficiaries can be your spouse, children, parents, or even a charity. This benefit acts as a replacement for your income and helps your family cope with various financial burdens:

  • Outstanding Debts: The lump sum can be used to pay off existing mortgages, credit card debts, or personal loans. This ensures your family inherits a debt-free estate and avoids financial strain.
  • Funeral Expenses: Funerals often come with unexpected costs. Death cover can ease the financial burden of arranging a respectful farewell for you, allowing your loved ones to focus on grieving.
  • Maintaining Living Standards: Your income likely plays a crucial role in maintaining your family’s current lifestyle. The death benefit can bridge the financial gap, allowing your dependents to continue living comfortably and meeting their everyday needs.

Convenience and Affordability:

Many superannuation funds offer automatic death cover as part of their basic membership package. This cover typically starts at a pre-determined amount and may be sufficient for young individuals or those with minimal financial dependents. The beauty of this automatic cover is that it often comes at a low cost, deducted directly from your super contributions before tax, making it a very affordable way to secure basic protection.

Tailoring Cover to Your Needs:

While automatic cover provides a safety net, you can customize your death cover to match your specific circumstances. Most super funds allow you to:

  • Increase Cover Amount: As your income grows and your family expands, you can increase your death cover benefit to ensure it adequately meets their future needs.
  • Add Optional Benefits: Some funds offer additional benefits like funeral cover or terminal illness cover, which provides a lump sum if you’re diagnosed with a terminal illness.

Key Considerations:

Before finalizing your death cover, it’s crucial to consider these points:

  • Review Your Needs: Assess your current financial situation, future plans, and your dependents’ needs to determine the appropriate cover amount.
  • Understand Exclusions: Death cover might not pay out in certain circumstances, such as suicide within the first year of cover. Read your product disclosure statement carefully.
  • Compare Options: Research death cover offered by different super funds and compare premiums, benefit amounts, and exclusions before making a decision.

Making Informed Choices:

Superannuation death cover offers a simple yet powerful way to safeguard your loved ones’ financial well-being. By understanding its benefits, affordability, and customization options, you can make informed choices that provide peace of mind and ensure your family’s security in your absence. Remember, discussing your cover details with a financial advisor can be beneficial, especially when navigating complex financial situations.


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