Almost 85 per cent of self managed super fund (SMSF) members aged 18 to 64 do not hold life insurance cover, new research from Plan for Life* has revealed. This is despite legislation enacted more than a year ago which says SMSF trustees now have an obligation to consider the need to hold insurance cover for their members.
Of course, many SMSF members do not hold life insurance cover in their SMSF because they hold it elsewhere, or because they are self funded and do not need life insurance.
Nonetheless, there is no doubt this survey suggests there is a significant number of SMSF members who have little or no life insurance, but should.
This is particularly the case where the person has dependants and/or debt, or if they have a business partner.
Should you review your life insurance position?
Find out if your family would be financially vulnerable – if you were to suffer a serious illness or injury, or if you died – by taking this quick quiz.
- Could you pay off all your debts in the event you suffered a permanent disability or if you died?
- Would you be able to pay your living expenses in the event you could no longer work due to a serious illness or injury?
- If you died, could your family afford to pay for their living expenses?
- Do you have a business partner? If they died, could you afford to buy their share of the business?
- If you died, could your business partner afford to pay your estate for your share in the business?
- If there is an individual in your business who is crucial to its success, is the business protected financially if that person had to leave the business due to serious illness or injury or death?
If you answered ‘No’ to any of these questions, we recommend you make an appointment to review your risk insurance position with one of our financial advisers.
*Reported in IFA magazine, 15 January 2015