When it comes to superannuation reforms, 1 July 2014 was a defining moment in terms of restrictions being placed on newly established personal insurances held inside superannuation. For example, from this date, Total and Permanent Disability insurance (TPD) policies with an ‘Own Occupation’ claim definition can no longer be held inside superannuation; however, it’s important to note that grandfathering provisions do apply for TPD insurance policies that were established prior to this date.
Given the above restriction, some insurer’s now offer a ‘super-linking’ option and when referring to TPD insurance it’s often called ‘super-linked’ TPD insurance. Briefly, super-linked TPD insurance allows you to obtain an ‘Own Occupation’ claim definition as well as many of the other benefits associated with holding personal insurances inside super (e.g. tax deductibility of insurance premiums and reduced pressure on your after-tax cashflow).
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