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Utilising Your Australian Super to Fund Life Insurance – Considerations for Australian Expats


We see many Australians living overseas unaware that they can use their super to fund their cash flow and asset protection. Buying Life Insurance through super can be a convenient and affordable way to get the cover you need.

Further, Australian life products are often more affordable compared to the local options and the definitions are world leading.

There are, however, a number of things you need to consider before you decide how you want to structure your Life Insurance.

What type of insurance can you access through super?

Through super, you have access to three important types of insurance cover:

  1. Income Protection which provides an income stream for a specified period if you can’t work due to temporary disability or illness.
  2. Total and Permanent Disability (TPD) which provides a lump sum benefit if you become seriously disabled and are unable to ever work again.
  3. Life Insurance provides your beneficiaries with a lump sum benefit if you die.

What are the advantages of taking out Life Insurance through super?

Using your superannuation to pay for your Life Insurance can be a good way to help you afford the cover you need, without eating into your budget.

You also have the opportunity to make before-tax contributions to super to pay for your insurance (e.g. through salary sacrifice), which may help reduce the amount of tax you pay.

What are the disadvantages of taking out Life Insurance through super?

If you don’t make additional super contributions to pay your insurance premiums, your retirement savings will reduce. Also, there are different rules around Life Insurance policies owned through super that may make benefit payments less tax-effective for your beneficiaries.

What else should expats consider?

Buying insurance through super may seem like the perfect solution, but there are some things you should consider first:

Keep track of your insurances through super
If you have more than one super fund you may be paying for more than one policy.

Not all benefits are tax-free
Tax may be payable on some benefits, depending on who receives the benefit and when it is paid out. If your beneficiary is not a dependant, there may be tax implications.

There can be delays in benefit payment
Insurers will pay the benefit to your fund’s Trustee, who will then distribute onto you or your beneficiaries.

Consider your beneficiaries

If you do not make a binding beneficiary nomination, or your fund does not offer binding nominations, the super trustee will decide who receives your benefits when you die. Usually, benefits are paid to dependents, after taking your wishes into consideration.

Using your super to fund your life insurance is a perfectly viable strategy but being aware of the various considerations is critical. Seeking advice from an Australian Life insurance Specialist key.


Written by: IMFG

Personal Insurances for Expatriates – What You Need to Know


Personal insurance relates to the insurances which protect you against sickness or injury to cover your costs of living and lump sums. Coming from another country to Australia, you are then exposed to a whole lot of new risks, issues, costs and lifestyle.

One of the key things you should be protecting is your personal well-being.

As you are in a new country, you don’t want to be put in a position where you have moved (and your family) and you can’t fund or support yourself.

In Australia, the rules are quite different and the insurances you may have had from another country could be invalid.  This is the first thing you should check preferably before you leave the country of origin. Our biggest asset is usually the least insured, that is our ability to earn an income.

Our guide on personal insurances, written by Scott Douglas from IMFG will equip you with all the information you need to make informed decisions regarding your insurances.

It’s very important to seek appropriate advice by a fully licensed Adviser who can provide you with what is necessary. The adviser will do a full needs analysis and make a recommendation on the products that are appropriate to you and your needs. With this guide, you can familiarise yourself with all your options and get a clear understanding as soon as you get to Sydney.

To read our guide please click here