It’s important to know that your retirement savings are reduced by the cost of your insurance premiums. That’s because premiums are deducted from your super balance to pay for your insurance cover – unless your employer pays for all of your insurance cover.

You need to check what other insurance cover you may have. If you have more than one super account, you may be paying premiums for multiple insurance covers you may not need. This will reduce your retirement savings, and you may not be able to claim on multiple covers. You can search for any other super you may hold under ‘Find my lost super’ by logging in to your online account. You may also hold insurance cover outside of your superannuation account.

The type and amount of insurance cover that’s right for you depends on your personal, family and financial circumstances — as well as your income and lifestyle. A financial adviser can help you decide the insurance cover that’s right for you. You can also call us for more information.

As an example, an expanding family or a reduction in personal debt may impact your choice of the type and amount of cover you have.

It’s important that you have the insurance cover that meets your needs at a cost that doesn’t inappropriately reduce your retirement savings. One simple check is to calculate your annual insurance premium as a percentage of your annual gross salary. For example, if your gross annual salary is $75,000, you may want to keep your annual insurance premiums to under $750.

If you have Income Protection with a benefit payment period of more than two years, it’s likely that the cost of your insurance will be more than 1% of your annual gross salary.

It’s easy to check the percentage of your annual salary you’re paying in annual insurance premiums. Grab a calculator and follow these steps:
Step 1 - Multiply Your monthly premium amount by 12, then
Step 2 - Divide that amount (your annual premium amount) by your gross annual salary, then
Step 3 - Multiply that amount by 100 to see the answer as a percentage.