Superannuation regulations have been introduced imposing additional obligations on trustees of SMSFs effective from 7th August 2012. Trustees are now required to consider whether their fund should take out insurance policies for its members. This must be documented in either the fund’s investment strategy or in the minutes of trustee meetings.
This means that SMSF Trustees now have an obligation to look at taking out Life and TPD insurance cover for their members. This is particularly the case where a member is still working and accumulating funds, as their death or disablement could have a devastating effect on their family and their retirement plans. Insurance will be less important for a member who is retired with sufficient funds in the SMSF to provide for their dependants in the case of their death or disablement.
Trustees can find the best value Life and TPD insurance for their members by comparing quotes from the largest life insurers in Australia on the Insurance Watch website (go to Compare Insurance Quotes Online ). All of the policies listed can be owned by a SMSF and premium payments can be made out of the SMSF account.