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Insurance within super

Trauma insurance

Section: 10.9

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.

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

Last modified: Wednesday, August 25, 2021