Insurance within super
ATO describes trauma insurance as a payment to a member if they are diagnosed with a critical illness or injury as specified in the policy, such as cancer, stroke, coronary bypass or heart attack. The lump sum is paid regardless of whether the insured person ceases work or becomes permanently disabled. In order to access the insurance benefit a member must meet stringent conditions of release in line with rules governing the superannuation fund. However, on 1 July 2014 changes to superannuation regulations impacted on the ability of super fund trustees to take out this particular cover. This was because there is no condition of release consistent with critical illness which would release the insurance benefits. Trauma insurance commenced before 1 July 2014 can continue to be held in the superannuation fund.
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Last modified: Friday, September 25, 2020