If you’ve ever lodged an insurance claim for anything, you will know the importance of being adequately insured.
Ever had a bike stolen and discovered too late that your home and contents policy doesn’t cover items that are stolen “on the road”? Or, have you ever tried to claim for podiatry services, for example, only to find that your health cover only covers the first $20?
Having insurance is great, but knowing you have enough insurance is better.
ElectricSuper accumulation members may have access to Death, Total and Permanent Disability Insurance and Income Protection (Disability Income Benefit) as part of their super.*
But have you looked at your own insurance needs lately? Do you know if what you are provided with matches what you actually need?
Let’s break it down.
Protecting your regular income
If you can’t work because of illness or injury, you may be eligible to claim Disability Income Benefit insurance through super. If you’re eligible, this will provide you with a fortnightly income of up to two-thirds of your salary for up to 12 months.
As with all insurance, you need to find your balance between the level of risk you are prepared to take and the risk you want someone else (the insurer) to take for you. You might be comfortable with cover for two-thirds of your salary for up to 12 months. But, if two-thirds of your salary and/or up to 12 months feels like it might not be enough to you, you can seek an income protection provider outside of super which can offer you income protection cover for a different amount or percentage of salary for 2 years, 5 years, or even through until you reach retirement age.
You should also find out what benefits your employer offers, as our Participating Employers have different employee benefits available to their staff and they may provide you with a level of cover above the two-thirds of salary you can receive through your super.
And, of course, if you don’t have Disability Income Benefit insurance as part of your super, you will need to consider if you want or need income protection insurance and then seek a provider who will offer you the insurance you need for a reasonable price.
Equally, if you have Disability Income Benefit cover and don’t need or want it, you can apply to cancel it.
Protecting your family and yourself
The other kind of insurance you could have through your super with ElectricSuper is Death and Total and Permanent Disablement.
You need to consider these insurances separately.
First, what happens if you die?
1. If you die, will those you leave behind be able to cope financially without your ongoing salary and support?
This starts almost immediately with paying for a funeral, but will go on to include the costs of a mortgage or rent, paying bills and maintaining a household, which could include tasks around the house that you currently take care of at no cost.
For example, you might do 50% of the housework, stay home with the kids 2 nights a week while your partner goes to night classes, cook 5 nights a week and do small household tasks like repainting a spare room or installing an extra power point in the kitchen. What will the cost of you not being around to undertake these tasks actually be? Will your partner need to get a cleaner in? What about a babysitter? Will the cost of food increase if they get more pre-prepared meals? And how much to hire a painter or an electrician?
You also need to consider if covering those expenses is actually important to you. It may be that your spouse has other sources of income, or other ways to provide for themselves and the family. It might be that you and your partner are happy to take some of that risk and not insure for those kinds of things.
Or, you might not have a family to worry about in the first place. Or, for any number of other reasons, having Death cover might not be a consideration for you at all.
You need to weigh up your personal needs for your situation.
The second point to consider is if you are totally and permanently disabled.
2. If you are totally and permanently disabled and can no longer work, what will happen? Will you be able to afford any required modifications to your home and car, and pay the regular bills (they just never stop)?
If your mobility changes due to your disablement, will you need to ramps at home, wider doors or other aids? Or will you need to modify the kitchen so you can reach everything, including the kitchen sink? Will you have to have the car modified to use your arms only, or only one foot? Or will you take taxis everywhere?
On top of these upfront changes, you may have ongoing medical costs as well as the usual costs of living, such as bills, school fees, meals out, haircuts and so on.
However, just as for Death cover, you need to consider your situation, what you think you might need and the risk you are prepared to carry.
Death and TPD insurances through ElectricSuper are tied together. It makes it important to consider both of these 2 questions when you review your insurance in your super.
How do you know what you need?
The Australian Government’s MoneySmart website has a great, easy-to-use calculator to help you work out your insurance needs. It’s quicker than you think. You can find the calculator here.
Once you have checked your insurance needs, review the insurance you have in your super. You can see what cover you have in the secure area of the website. If it’s not the right amount for you, you can apply to increase, decrease or cancel your cover. Find the forms to amend your cover here:
*Accumulation Scheme “active” members under 60 are automatically provided with cover on joining. Retained members may or may not have insurance automatically provided as part of their insurance, depending on their circumstances when moving to a Retained account. Spouse members have different conditions and do not automatically have Death and Total and Permanent Disability (TPD) cover. Spouse members aren’t eligible for Disability Income Benefit. You can read more about these two membership types and the insurance provided on our website. You can also see what insurance you have in your super in the secure area of the website.