SMSF Insurance

With StakeSMSF, you have the option of having insurance paid for by your new SMSF.

It’s important to note that your SMSF doesn’t need to hold Life and Total and Permanent Disability (TPD) insurances, but any decision not to obtain insurance must be recorded in your SMSF investment strategy document.

Disclaimer

Before reading on, we need to ensure we’ve got the legals sorted, and you know that StakeSMSF does not provide financial product advice or recommend any financial products. This information is general in nature and does not consider the objectives, circumstances or financial needs of any particular individual.

Insurance and Transferring Super to SMSF

When transferring an existing super to an SMSF, you have to decide whether to keep or replace any existing insurance cover. Your options are:

1. Get new insurance in your SMSF;
2. Keep insurance by maintaining existing super account;
3.
Cancel insurance by closing account without replacement;

If you transfer 100% of your existing super account to an SMSF, any insurance cover attached to that account will be lost.

If you decide to keep a balance in your existing super account (to maintain insurance cover), you should contact your existing fund and check their requirements and if they specify a minimum balance or a requirement for regular contributions.

Some insurers will enable you to do a ‘cancel and rewrite’, which involves transferring an existing policy to your SMSF.

A licensed financial adviser can help you figure out your insurance needs and recommend suitable policies to suit your needs. Online comparison websites can also assist you in researching and obtaining insurance.

AGI INSURANCE

AGI Group Insurances Pty Ltd (AGI) is a referral partner of StakeSMSF. AGI is a third-party insurance administrator based in Sydney, specialising in group insurance. AGI holds an Australian Financial Services License (Number: 379565) under the Corporations Act 2001.

AGI can be contacted via their website, by emailing admin@agigroup.com.au or by phone: 02 9190 2500. 

This content is not a recommendation to acquire any insurance product available through AGI. If you obtain an insurance policy through AGI, Stakeshop Pty Ltd may receive commission payments of up to 25% plus GST on the insurance premiums paid.

TYPES OF INSURANCE

The two main types of insurance cover your SMSF can obtain are Life and TPD. Life insurance pays a lump sum to the SMSF where the insured member dies. TPD pays a lump sum when an insured member is sick or injured to an extent they will never work again.

Life and TPD insurance premiums can be paid for by your SMSF.

AGI also offers standalone ‘own occupation’ TPD insurance which is held in your personal name. Premiums for standalone TPD are paid personally. Own occupation TPD insurance provides a lump sum where you can still work, but due to illness or injury cannot continue your usual occupation. 

Income protection insurance can also be obtained via AGI and held in your personal name.  Income protection insurance premiums are paid personally and are tax deductible. 

 

PAYING FOR SMSF INSURANCE

Life and TPD insurance premiums can be paid for by your SMSF and are normally tax-deductible.

When you complete an application through AGI you need to provide the BSB and Account Number for your SMSF account. You can have the premiums deducted annually (recommended) or monthly. 

Premiums are taken from your SMSF bank account on the 15th of the month AFTER the policy is approved.  It normally takes two to three weeks for the insurer to approve a new policy meaning a minimum of four weeks between submitting the application and the premiums being debited from your SMSF bank account.  This means you can confidently complete the application with AGI and by the time any premiums are due your SMSF would have received the transfer of your existing super.

You can also request your quote be emailed from AGI.  You can then quickly complete the application at a later time.