Australia | New Zealand

INCOME PROTECTION AND SUPERANNUATION

Many people think they are covered by income protection within their superannuation policy but most income protection policies inside super provide for only 2 years’ worth of income protection.

This could be a problem if, say, at 35 years of age you could no longer work because of a serious accident or illness. The cover inside your super policy would provide income until you reach 37. What happens then? It’s a long way to retirement age from there, and according to Centrelink, the current Disability Pension only pays about $615 a fortnight. Could you pay medical expenses and live on that?

There are options, however. Speak to your fund and find out exactly how much income protection cover you have in your super policy. Is it 2 year’s worth, 5 years’ worth or does it cover you till you’re 65? You may then be able to boost your super fund if needed. You may also consider supplementing your super fund with an income protection policy outside super.

Either way, don’t leave it until it’s too late. Talk to your super fund or a licensed financial planner now.

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