Life/TPD Insurance Broker through Super

Didn't know where to post this but it's always a legal battle to get insurance companies to pay out when the time comes so this section made sense

Need recommendations for a Insurance broker to help me with Life/TPD policies that takes premiums from Super and stays with me regardless of which Super/SMSF I move to. A bit tired of non-comprehensive group policies from super funds and having to move/apply again with different funds. I know some level of portability exists but is not ideal. A level cover from a non-scandalous insurance provider while I am still young and healthy and so I don't have to worry how I'll be 10,20,30 years down the track.

 

Google Liam shorte.

 

Insurance brokers for super ? I think you misunderstand the market. Insurance for SMSF members and super members generally isnt through brokers. There is NO portability of death cover in super since the super fund gets the cover not the member.

Insurance cos dont battle claims. Defined events like death get paid. Terms for TPD can be disputed if a defined event isnt met. Like...disability.

Insurance is complex and in/out of super strategies that consider life, income and other events is complex. Licensed advisers are needed

 

Doesnt sound like its a compliant form of financial advice. ASIC would take a AFSL if we gave financial product advice with no meeting or comprehensive advice. Paying insurance from super means the MEMBER isnt insured. The fund is. Seems like a life isurer under commission v's a financial adviser.?How 1980s

Its illegal to recommend insurance without detailed review of all the persons financial needs, risks, costs and provide a written form of advice that addresses the needs of the person tht also satisfies the bests interests of the person

 

I spoke in general terms. Insurance recommendaiosn are financial advice

 

I mean portability in policy terms. Right now I am with AustralianSuper but if I move to another fund I either have to keep it in place or "port" it to over to the new fund with their own terms. Also Life/TPD policies inside super are not very flexible.

I previously talked to a BT financial advisor about this, sure enough they came back to me a with BT policy (Duh!) but the policy seemed sound but felt like not all insurers were considered (Vested interest).

IIRC, it was a policy with level cover under a BT Master Trust that gets it's Life/TPD premiums from super(whichever fund I am with) and combine with own-occupation TPD outside super and optional Income Protection and Trauma insurance outside super because of own-occupation and to age 65 requirement on my part.

Others seem to be doing this Master Trust thing where premiums are paid from Super but the policy terms and insurer are not from that superfund. Don't know the technical term for this?

 

Few (none ?) industry funds have portable cover as they use cheap group cover. Sometimes extra cover can be portable ONCE.

BT cover can cost 20-40% more outside BT. And in some cases unobtainable. Talkig to BT about cover is like asking AMP for a quote for cheaper cover. Wont happen. Like asking Westpac for a better deal. They are allowed to not disclose. Financial planners that are independent of the bank can quote anyone they choose and are obliged to consider the client interest above the bank interest. There is a tip.

 

I have heard some financial advisors recommending leaving some investment funds with existing investor, so you can keep your insurance in existing fund, while moving most of funds to other investor? This would make sense if they offered better insurance options.....

 

This seems to be a common practice for SMSFs where they leave a small amount in an industry fund to pay for group insurance which is usually a lot cheaper than insurance through SMSF. That works if the person is happy with the terms of the group insurance policy.

I think AGI is a player in this niche of offering group insurance in SMSFs direct. Don't know if they are any good.

 

@JohnPropChat What it sounds like you're describing is a 'partial external rollover' to fund the insurance premium - meaning that it is not housed inside of your super fund be it SMSF, retail or industry. Which means that you should be able take it with you wherever you go you and just change which fund the partial rollover comes from.

As a financial planner I have written this style of Insurance as I can take the best of both worlds for my clients - find the best super for them and then the best insurance and combine. More often than not I find that they're not by the same provider.

You could use a planner to get your insurance but be VERY CAREFUL - there is a lot to consider when getting underwritten life and TPD. Depending on your age your planner should be considering stepped v. Level premiums too. It is all depending on what is best for you. I'm a salary paid planner so commissions don't weigh on my decision but they will for a commission based planner - something to keep in mind.

If I were to look for a planner myself i'd be looking for a fee for service planner. I'd also be getting them to waive the commissions for an up-front flat fee. Not easy to talk one into doing though! One other thing to look for is who they're licensed by - planners who are licensed by a licensee who creates its own products are usually incentivised to sell that licensee's products (similar to what you described with the BT advisor). That particular planner may only be accredited with BT too - which may also limit them.

A planner is obligated to give the full process of a statement of advice to recommend insurance - so bare that in mind. Usually that will have a minimum cost of $600 upwards to 5k or even more depending on advice. If it is less than that it is likely they're taking a commission.

A good place to start would be by getting a trusted recommendation from someone nearby. Over the phone advice is possible too but difficult and much slower as everything needs to be print/sign/scanned, phone/skype meetings etc. It is possible and I have done it but it's not the ideal situation - probably only worth doing if you cant find trusted advice nearby.

As a planner I'm under the same obligations too so in no way can I offer you any advice on the matter without proper procedure. Everything I have said above is general information and you should seek professional help. PM if you want to discuss further.

 

@wylie What you've described sounds like your planner has done a similar thing to what I just described but without more info I could not confirm.

@Paul@PFI You're right in that Death and TPD is paid to the fund as it is owned by the fund. By setting up a partial rollover to another fund you're essentially rolling it into another super fund or master trust for just the insurance premium amount and that's where it will be paid. Assessment of whether or not it can be paid out from the fund will still come into play (a condition of release will still need to be met). There are other options out there now though - where you can pay partially from super and some from your pocket so that you can claim under either definition. If the insurance can't be claimed under the conditions surrounding SIS act and related legislation then it can potentially be claimed on the additional terms purchased by paying some of the premium outside of super. I know OnePath call it 'Super-link' i'm not sure of others I don't often get clients that opt for that option.

 

That makes so much more sense of how it all comes together. I am in the process of evaluating my insurance needs and looking for an Insurance broker that can help set it up. Will message you as well. Thanks.

 

It's surprising that an in-and-outside super combo of insurance hasn't gained much popularity considering that it helps quite a bit with cash flow for large premiums.

 

It has - Its just most people are led to believe that industry super funds are the best product and they tell mistruths about financial advice being something based on commissions. They cant give members any financial advice - If they did they would have to disclose the limits of the cheap insurance.

You may be surprised how many think they have income insurance in their fund when they dont. Or they have cover but would be denied a claim.

 

If you switch insurers though are you no longer covered for pre-existing conditions that weren't pre-exisiting when your original superannation insurance started?

 

Sometimes they do transfer existing cover but to what extent is anyone's guess.

 

ahhh.. The search for an independent, impartial and unbiased financial product advisor.

They are hard to find. If you have one fantastic.