Superannuation is an important part of retirement planning, and the earlier you start saving, the more time your money has to grow through compound interest and earnings. So you might ask “Should I have personal insurances inside of my SMSF?” Let’s break that down.

Personal insurances

Firstly, it is important to note that the decision to have personal insurances inside of your SMSF will depend on your individual circumstances and needs, as well as the importance that you place on having this type of insurance. Such as personal insurances, such as life insurance, total and permanent disability (TPD) insurance, and income protection insurance, provide financial protection in the event of unexpected illness, injury, or death. By having these insurances within your SMSF can provide certain benefits, such as tax deductions on premiums and potential tax advantages on claim payments.


Are there limitations? 

However, before deciding to have personal insurances within your SMSF, it is important to consider the costs and limitations associated with this type of insurance. Your insurance premiums can reduce your SMSF balance and impact your retirement savings. Additionally, there may be restrictions on the types and levels of cover available within a SMSF. These limitations can impact the effectiveness of your insurance and leave you under-insured in the event of an unexpected event.


Benefits & risks

Despite these limitations, having personal insurances within your SMSF can be a beneficial option for some individuals. One of them for example is being able to incorporating your insurance within your SMSF. You can streamline your financial management and potentially benefit from tax advantages. To determine whether this option is right for you, it is essential to evaluate your individual circumstances, risk tolerance, and financial goals.


Contacting the experts

It is always recommended that you seek advice from a licensed financial advisor before making any decisions regarding personal insurances within your SMSF. An advisor, as as Financially Sorted can provide you with an understanding of your options and the potential benefits and drawbacks of each. Additionally, we can help you assess your risk tolerance and guide you towards an insurance solution that aligns with your financial goals.


At Financially Sorted, we understand the importance of financial management and the role that personal insurances can play in securing your financial future. We can help you navigate the complexities of insurance and ensure that your financial management aligns with your individual goals and needs.


To learn more about personal insurances within your SMSF or other financial management options, Contact us on (03) 9370 4800, or email us below. Our team of experienced professionals is always available to provide you with the guidance and support you need to secure your financial future.



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Moonee Ponds

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38 Margaret Street
Moonee Ponds VIC 3039
P: 03 9370 4800

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Wheelers Hill VIC 3150
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