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Insurance in super

Insurance premiums and contributions caps

Section: 13.9

Contributions that are made to super in order to fund insurance premiums will count toward relevant contributions caps. This includes contributions made to standalone insurance offerings held within a superannuation environment.

Contributions made by an employer, or personal concessional contributions will count toward a member's concessional contributions cap, while after-tax contributions used to fund premiums will count toward a member's non-concessional contributions cap.

Self-insurance generally prohibited from 1 July 2013

Historically, a fund's current or contingent liability to provide death or disability insurance was often provided - at least in part - by the assets of the fund. Since 1 July 2013, super funds have been prohibited from self-insuring, with two exceptions.

Firstly, super funds that self-insure at 1 July 2013 were allowed to continue self-insuring until 1 July 2016. From that date, death or disability benefits could only be provided to members if they are fully supported by an insurance policy.

Secondly, super funds that self-insure at 1 July 2013 are generally be able to continue to self-insure in respect of defined benefit fund members.

Last modified: Wednesday, July 24, 2019