Many SMSF members have insurance paid out of their SMSFs. Policies include for death, permanent incapacity, temporary illness and temporary capacity.
While insurance is not mandatory, the SIS Act is 4.09 includes that the SMSF must review its insurance needs regularly as part of its regular review of the investment strategy.
Insurance in an SMSF should line up with a fund’s overall investment strategy and it is good practice to review your insurance coverage annually, because circumstances can such as your needs in relation to the age of your children and debts. Read what experts say here.
In some cases, SMSF members have insurance elsewhere and do not have it paid by the SMSF.
There can be tax implications, deductibility and other advantages to having your insurance in the super environment.
So next time your accountant asks you to review your investment strategy, ask them to help you make sure you’re getting the most out of your insurance.