Life insurance premiums typically get paid out of your super account. While this means that your regular take-home pay won’t be affected, it also means that your super figure will receive constant debits. If you ever stop making regular super contributions, this means that your super amount will start to reduce.
Life insurance held within your super is an easier option. You can have regular life insurance payments made in a tax-effective way, without necessarily worrying about it — unless you stop working. Be aware though that for life insurance held within your super, you may not be able to access benefits until you retire.
Alternatively, a life insurance policy that’s held outside of your super is a more portable option. If you change employers, you don’t need to worry about setting up a new policy, and you can still receive coverage regardless of where you work. You’re able to access your benefits immediately. The biggest difference though is that you’ll make regular post-tax payments for this type of life insurance coverage.
So it really depends on your financial situation as to whether or not you choose to hold life insurance within your super. Your life insurance adviser can provide guidance on what’s going to work best for your situation.