Should I take out Life Insurance through my superannuation?

Buying Life Insurance through super can be a convenient and affordable way to get the cover you need. 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 cover  can you buy through super?

With NobleOak, the two types of cover you can buy through super are:

  • Life Cover – Protects your family’s financial security if you die or are diagnosed with a terminal illness, and
  • Total & Permanent Disability Insurance (TPD) – Protects yourself and your family from financial stress if you’re permanently disabled and unable to work.

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.

Key Considerations

Below is a table of the key things you may want to consider before you decide which option is right for you:

Inside superOutside super
Cover typesNobleOak offers Life Cover and TPD Insurance only.NobleOak offers a full range of covers, including Life Cover, TPD, Trauma Insurance and Income Protection Insurance.
PremiumsYou pay your insurance premiums using tax-deductible superannuation contributions.You pay your insurance premiums from your after-tax income.
Tax on benefitsBenefits paid to your spouse or dependants are generally tax-free. Benefits paid to other beneficiaries may be taxed up to 31.5%.Benefits paid are generally tax-free, regardless of who they’re paid to.
Retirement savingsInsurance premiums paid reduce your retirement savings, so you may want to make additional super contributions.Your retirement savings are not affected by your insurance premiums.


This is a general guide only. Readers should consult a taxation adviser for their personal circumstances.

Let’s get started.

If you know what type and level of cover you need, get a quote now to see how our prices compare. If you still have questions, request a call back and one of our helpful insurance specialists will get in touch with you, or call us on 1300 041 494.

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