Pros & Cons Of Paying Insurance Through Super

The benefit of paying insurance through Super is cash flowed from super, so you don’t have to pay it personally and it may be tax-effective. If there is a portion of life insurance that’s usually deductible in super and if you pay for that outside of super, then it is not tax-deductible. 

The con is it reduces your super balance, the insurance payments, or it could suck up a lot of your contributions that you put in straight to insurance.

“Payment made to fund” means that if you die, your life insurance pays out. If you’re paying it from super, and if super is the policy holder, then the life insurance payment will be paid to the super fund, but not on your estate. It has to be dealt with by the fund and you can get it to the estate if you’ve set it up that way. But keep in mind that there are two steps if your wish is to get it into your estate.

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