Can I have more than one Life Insurance cover?
Many people have two Life Insurance covers for broader cover and greater peace of mind. One is in-built within their superannuation fund; the other is with a separate Life insurer like NobleOak.
Question is; why would you take out separate Life Cover when you have Life Insurance within your superannuation already? It comes down to what you’re covered for within superannuation, and whether it is sufficient to meet your needs. If not, you may want to consider additional cover to close this insurance gap.
Think about it. Your reasons for taking out Life Insurance may be to get cover for a financial sum that would cancel out your debts and leave your loved ones in a financially secure situation if you were to pass away. Yet the Life Insurance within superannuation may not often be enough to cover your mortgage or other debts – which could leave your family exposed to financial stress.
How does Life Insurance within super work?
In general, superannuation funds may not take into account your personal finances and generally could cover you for a lower amount of Life Insurance than if you did get covered with insurers like NobleOak where you can nominate the level of cover you require. The reason why the sum insured within superannuation is generally lower is because superannuation funds base the amount of cover on ‘group risk’, not your own individual circumstances.
Sure, it may mean when having insurance within your super fund, that you don’t have to answer any medical questions to obtain the insurance, but it could also means that there might be an insurance gap in the amount you would need to be financially covered for.
Every super fund is unique, so you should ask your existing super fund what their cover is when it comes to Life Insurance. For example, you might discover that you might be underinsured for Life Cover if your super fund only pays $100,000 to your spouse if you were to pass away.
Not all super funds include automatic Life Insurance. You generally have access to basic cover if your employer has a contractual arrangement with the trustee of the superannuation fund to pay super contributions. If you organise your super independent to your employer, then you may have to apply for Life Cover within super separately – or you may choose to simply take out Life Insurance outside of super altogether.
Also, in general, Life Insurance within super doesn’t include Trauma Insurance – which helps to protect you and your family financially against a wide range of serious medical conditions.
Boosting your cover with more Life Insurance
Given some of the limitations of having Life Insurance within super, many people choose to take out additional Life Cover to effectively ‘top up’ what they’re covered for within super.
It’s a good idea to work out how much insurance you need to comfortably provide for your family if you were to pass away, and work back from that figure. If insurance within super isn’t enough and you want complete peace of mind for your family, then you should consider taking out more than one Life Insurance policy.
If you have questions about how NobleOak® Life Cover could support your existing Life Insurance within super, contact one of our Insurance Specialists today on 1300 041 494.