Insurance premiums can be paid by an SMSF on behalf of the Beneficiaries (Members) in the SMSF.
Although insurance premiums can be paid by an SMSF, you can generally get better rates for insurance through Industry Superannuation Funds. Industry Funds negotiate group rates with insurers at better rates than what you can get on an individual basis.
If you decide to pay insurance from your SMSF (or Industry Fund, as explained above), the types of insurance are:
- Life insurance
- Total and permanent disability (TPD) insurance
- Income protection insurance
It is worthwhile to note that Life Insurance premiums are not deductible in a personal capacity as an income tax expense but is deductible as a tax expense in an SMSF.
To obtain SMSF Insurance service within Australia, you can use any Insurance provider of your choice. The Trustees can consult with external insurance brokers. Please be mindful, the brokers may perform an extensive search on personal history which can be expensive, ranging from $5,000 to $30,000.
It is the Trustee’s discretion on which insurance provider to use. The SMSF will then pay the insurance premiums on your behalf.
The Trustees can use a bank or any insurance broker of their choice to take an insurance policy for the SMSF. Superannuation warehouse does not provide any advice on which insurance provider to use.
For Australian Group Insurance you can use the SMSF provider code AUS005 to apply for a new policy at www.agismsf.com.au.
You can also transfer existing insurance cover (up to certain limits) from your retail policies to super funds.
