You wouldn’t drive your car without insuring it so why doesn’t anyone think to insure their most important assets?

By AMY STOCKWELL.

Most people are familiar with insurance to protect your assets – your car, your home and contents, your pets, and your health. If you are a celebrity, it’s not uncommon to insure assets of a different kind, such as: your backside (J-Lo insures her profit-making posterior for $27M), your legs (David Beckham for $70M, Tina Turner for $3.2M and Heidi Klum for $2.2M), your voice (Bruce Springsteen for $6M and Rod Stewart for $15.5M), your breasts (Dolly Parton for $3.8M and Jennifer Love Hewitt for $5M) and, ahem, your manhood (thanks, David Lee Roth who insures “Little Elvis” for $1M).

Just as an FYI, you should know that this post is sponsored by Australian Super. But all opinions expressed by the author are 100% authentic ad written in their own words.

While celebrities like to protect their money-making assets, for we mere mortals, there is often much less focus on protecting our earning potential.

In fact, very few of us think much about protecting our ability to earn an income – despite the fact that many of us would struggle to meet our rent, mortgage, bills and survival needs if we had to go as little as a month without a salary (let alone a life-time being unable to work).

If you are the main breadwinner for your family, it is clear that if you fell ill, were injured or died, your family may struggle to meet repayments and to raise children without your income. This may be the case whether you are injured and can never work again, or if you are simply out of action for a few months.

But even if you are the primary care-giver (rather than the main bread-winner), it is important to protect your capacity to do that work. Say, for example, you are responsible for child-rearing in your family and you fall ill or pass away – your partner will not only need to continue to work to bring in an income, they may also need to pay to have the children cared for. It’s not a pleasant thought, but it is one that deserves your attention.

Now, you could run around assessing different insurance companies and comparing their costs for protecting your income (although doing this legwork is always a good idea if you’ve got the time).

But what you may not know is that you may be able to get insurance that protects your income and your family if you get sick, injured or pass away from your superannuation fund.

In addition to not having to run around comparing the different insurance companies, there can be benefits to getting your death, injury or income protection insurance through your super fund.

Firstly, there is the cost. Superannuation funds are big, so they can get group discounts on insurance premiums due to their sheer buying power. It’s often cheaper to get your insurance this way.

Secondly, premiums for insurance through your super fund are paid from your super account, not your after-tax income. , Given that your insurance premiums are deducted from your super fund, it is a lot easier to manage (no remembering to pay bills!). Plus, deduction from your super fund also means that you’ll have cover for you and your family even if money in the family budget is tight. It’s important to note here that insurance through super still costs money (even though it is coming out of your super account, so you may not notice it day-to-day). You may wish to consider topping up your super so that your nest egg continues to grow. If you salary sacrifice to add to your super, you effectively salary sacrifice your insurance premiums too, reducing your taxable income (and the amount of income tax you pay). Salary sacrificing to pay for your insurance cover still counts towards your pre-tax contributions cap. You can get more information from your fund about getting insurance through your super fund, and it’s a good idea to get financial advice before deciding whether to salary sacrifice to pay for your insurance cover within super, or whether holding your cover inside or outside super is best for you.

Finally, some funds automatically accept you for basic death, permanent and temporary incapacity cover without the need to provide health information. This means that there is no waiting or messing about getting a medical from your doctor.. Remember to check the level of your automatic basic cover as it may not be enough to meet your needs. Usually you can apply for more cover (up to certain limits) by providing health information to the insurer.

Getting insurance through your super fund can be a cost-effective and easy option for protecting your income (and your family).

Sure, your super fund may not insure your bottom like J-Lo, but death, injury and illness insurance will cover your backside if the worst happens and your family is left without an income.

The views expressed in this article are those of Mamma Mia and do not necessarily reflect those of AustralianSuper (AustralianSuper Pty Ltd ABN 94 006 457 987 AFSL 233788 the Trustee of AustralianSuper ABN 65 714 394 898). AustralianSuper does not accept responsibility or any liability arising from the content of this article, which is of a general nature and does not take into account your personal objectives, situation or needs. Before making a decision about your super consider your financial requirements and read any relevant Product Disclosure Statements. Investment returns are not guaranteed as all investments carry some risk. Past performance gives no indication of future returns.

AustralianSuper can make all the difference to your super savings.

One of Australia’s largest industry funds with more than 2 million members. AustralianSuper offers good long-term performance that can help you save more over the long term. 

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Have you thought about getting insurance through your super fund? What do you have insurance for?