Opinions or Recommendations on Insurance inside SMSF

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Jose P, 23rd Oct, 2020.

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  1. Jose P

    Jose P New Member

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    Just wanted some opinions on who to go with for personal insurance inside our SMSF, we have been recommended NEOS by an advisor, but when I was given the quote for the yearly premium for me alone was $2700. it includes Life Cover $1million, TPD Cover $1 Million and Income Protection.

    Is this insurance over the top for a 36yr old male?

    With both me and my wife together it was just over 4k in yearly premiums for insurance, this just sounds insane to me, is this normal because its inside smsf?

    Is there another company other than NEOS to for these products?
     
    Jose P, 23rd Oct, 2020
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    To answer this would require an afsl
     
    Terry_w, 23rd Oct, 2020
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  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Generally an adviser or broker is wise as there is a huge cost variance. Smsf policies are far far more expensive than group industry cover. Is the policy a stepped premium or not? The key difference is one policy premium stays close to flat but cover plummets. The other the premium steps up.
     
    Paul@PAS, 24th Oct, 2020
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  4. Redwood

    Redwood Well-Known Member

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    Unfortunately, the price is not insane and may have just increased as insurer held back premium increases til now.

    You need to consider the cover against your personal situation, usually debt plus putting kids through school as to the cover that a reasonable financial planner will recommend.

    Stepped v level is important, advisers trick you into stepped which is cheaper until the break even point and generally when you need the insurance most (say 55-60) thats when stepped premiums skyrocket.

    Cheers Ivam
     
    Redwood, 24th Oct, 2020
    #4
    Paul@PAS likes this.
  5. sillydad

    sillydad Active Member

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    Sounds similar (slightly cheaper) to what I pay and around the same age (Zurich/OnePath). Only difference is we have always had insurance in personal names - only life insurance within SMSF. IP tax deductible.
     
    sillydad, 24th Oct, 2020
    #5
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    At 15% the variance is trivial. IP wait times and other issues can influence eg if Peter has long service leave accrued the wait time of 60 days may not be a worry
     
    Paul@PAS, 26th Oct, 2020
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  7. JohnPropChat

    JohnPropChat Well-Known Member

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    Fully underwritten insurance policies from reputable providers are not cheap. SMSF or not. Read the PDS inside out and make sure it meets you needs, so many gotchas and insurance brokers often push clients to a specific products.
     
    JohnPropChat, 26th Oct, 2020
    #7