Life Insurance
Life insurance provides financial security generally in the form of lump sum amount payable upon the death of the life insured. Dependant on your situation life insurance may be held inside or outside superannuation. You are able to terminate the policy at any time, for example if your circumstances change, and you no longer require life insurance. Generally persons with dependant children require life insurance, unless their assets are such that their family home is paid off, and they have enough funds to meet their children’s long term financial needs including education expenses.
Premiums for life insurance held through a superannuation fund are tax deductible to the superannuation fund. Purchasing your policy via superannuation will not impact on your personal cash flow, as the premium will be deducted directly from your superannuation. You may, however, wish to make additional contributions to superannuation in order to offset the withdrawals from your fund. However care needs to be taken in holding policies through superannuation and the appropriateness needs to be assessed on a case by case basis.