Protecting your wealth in good and bad times with your SMSF

Recent superannuation regulation has been introduced which increases the obligation on trustees of SMSFs which takes effect as of 7th August 2012. Trustees will be required to review and make a decision as to whether their fund should take out insurance policies for its members. This is normally documented in either the fund’s investment strategy and or in the minutes of trustee meetings. According to comminsure’s report which they commissioned to collect the latest insurance statistics available, many Australians are heavily underinsured by $3.1 trillion and only half – 56% – of Australians have life insurance.

    This means that SMSF Trustees will have a serious obligation to consider taking up Life and TPD insurance cover for their members. This is especially the case where a member is still working and accumulating funds, as their death or disablement could have a significant impact on their family and their retirement goals or plans. In some cases insurance may be less important where a member is retired with sufficient funds in their SMSF to provide for their dependants should they have a death or disablement.

    As a trustee you can use the online insurance calculators to help work out how much insurance your members may need.