What compensation is available through my superannuation?

Published 27 Mar 2015

Superannuation funds are designed to provide you with a nest egg for when you retire from the workplace. However, your super fund can also give you financial protection in a broad range of circumstances aside from retirement.

For example, you may be unaware that your superannuation may also cover you for illnesses, injuries and disabilities during your working years. Should the worst happen, your family could also receive death benefits.

Here are some of the forms of coverage that may be included in your super scheme, as well as a brief description of what you can expect to receive.

Income protection

If you can’t work due to injury or illness, income protection will ensure you receive benefits until you are able to return to the workplace. These policies often pay monthly and are restricted to approximately three-quarters of your gross wages.

You will not receive a lump sum payment, although there may be a limit on how much you can claim over the period of your time away from work.

Total and permanent disability

Definitions of total and permanent disability (TPD) can vary, but you must usually be unable to ever return to the workplace in your former capacity to make a successful claim.

TPD claim can result in two forms of compensation. You may be eligible for a lump sum payment based on your insurance policy, as well as the early release of your superannuation.

Critical illness cover

Serious conditions can strike at any time, whether it’s a heart attack, stroke, cancer or organ failure.

With critical illness insurance, you will be covered across a range of different diseases and other health issues, enabling you to seek the medical attention you need without having to worry about money.

These policies pay out in a lump sum, although self-inflicted injuries and sports accidents are usually excluded.

Death benefits

Knowing that your loved ones will be financially secure in the event of your death is important, which is why you should check what benefits are available through your superannuation policy in worst-case scenarios.

Furthermore, by selecting chosen beneficiaries, you can ensure the money from your pension fund is distributed according to your wishes. However, there are a number of legal considerations with death benefits, so you should get in touch with a superannuation disputes lawyer to discuss your options.

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