Does your Superannuation Cover You Death or Disability?

Most Australians don’t actually know too much about their superannuation policies. What a lot of people don’t realise is that your superannuation policy might save you heaps of money if you find yourself hurt in an accident or if you develop a medical condition.

Knowing your rights under your superannuation policy is essential, and having good advice on exactly where you stand is important should you ever get injured or develop a medical condition that means you’re unable to work. For this reason alone, it’s worth finding out what exactly your policy covers. But first, let’s start with the basics.

How Superannuation Works

Your superannuation policy is basically your pension. Your employer is required to put a percentage of your salary (9.25% these days) into your superannuation fund, and you’re encouraged to put some personal savings in there as well. Once you retire or once you reach a certain age, you can withdraw money from your superannuation fund and live off of it.

But Superannuation Can Be a Whole Lot More

Now here’s where things become interesting. What a lot of people don’t realise is that your superannuation policy also includes insurance that will cover you if you’re injured or develop a medical condition that leaves you unable to work. These benefits won’t be deducted from the money you and your employer contribute, but rather add to it.

The benefits from your superannuation policy can range from a few thousand to hundreds of thousands of dollars. Whatever your situation is, it must meet certain criteria as set out in your policy before you’re able to receive your disability insurance benefits.

Total and Temporary Disability

If your disability is temporary, then you could qualify for Total and Temporary Disability (TTD) benefits. This comes usually in the form of weekly or monthly payments based on a percentage of your normal salary. A fixed period is usually agreed upon, after which there is a waiting period of 1-6 months before you can file your claim.

In the event that your disability is permanent, you may qualify for Total and Permanent Disability (TPD) benefits. In this case, you will receive a lump sum once you prove that you’re permanently unable to work—both at your normal occupation and at any other occupation commensurate with your education, training, and experience.

Trauma Insurance Benefits

Not only might you be eligible for disability insurance benefits should you get into an accident or develop a medical condition, but you could also be eligible for trauma insurance benefits. Of course, you’ll need to take out a policy first.

Trauma insurance covers certain medical conditions or surgery, but it has to be specified in your superannuation policy ahead of time in order for you to receive benefits. Some of the most common claims for trauma insurance come from those who have suffered a stroke, heart attack, or have cancer.

Know Your Rights Under Your Policy

Your superannuation policy can provide much more than you might think, but knowing what you’re covered for under your policy is essential. Superannuation companies have been known to reject TPD applications without providing proper reasons.

Be sure to take another look at your policy and modify it so you will be covered in the event of either an accident or the unexpected development of a medical condition. If you’re not sure what your policy entitles you to, speak to a legal expert to find out.

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