In this guide
Along with concessional tax rates and incentives like the co-contribution, your super account can also offer a range of less talked-about benefits you may have overlooked.
1. Discounts and rewards
Some super funds partner with retailers and other providers to offer their members goods and services at a lower cost.
For example, members may have access to discounted private health insurance, holidays, educational courses, or even gift cards to use on everyday shopping like groceries.
Check whether your fund has a rewards program and if you can save on any purchases you have planned.
Even if your fund doesn’t directly offer rewards, you could benefit from the Grow My Money service. Grow My Money is a program that allows you to accumulate rewards from your regular shopping that can be turned into super contributions paid into your account on a regular basis.
2. Get insurance without a medical
Most large super funds automatically offer their new members a valuable range of life and disability insurance cover as part of their fund membership, which can be an easy way to provide protection for yourself and your family.
Even better, this automatic insurance doesn’t require you to go through the underwriting process, which is usually required to get a new insurance policy. That means no need to complete a questionnaire or attend a medical.
Aside from the time you save, automatic cover is a great benefit for people unable to obtain insurance cover (or cost-effective cover) outside super due to their age or ill health. If your insurance is likely to come with an additional loading or exclusions on the premium due to pre-existing medical conditions, or even to be declined altogether, automatic acceptance can save you real money and allow you to get a policy in place.
The level of automatic cover offered is usually low, but an option may be available to increase the sum within set limits, and without underwriting, if you apply immediately when joining. No-questions-asked increases are also often available at set life events such as having a baby or purchasing a home.
Importantly, pre-existing conditions are commonly excluded until you’ve been actively working and receiving employer contributions into your account for an agreed length of time. If you don’t join the fund immediately when starting work with a new employer that will be contributing to the fund, the exclusion on pre-existing conditions often lasts several years. This is commonly called limited cover.
Super funds explain all the terms and conditions that will apply in their insurance guides, so be sure to read carefully and ask any questions you have before joining the fund.
3. Cheaper life and disability insurance
Most publicly offered super funds use one insurance policy to cover all their members. This is called group insurance and it is usually less expensive than an individual policy since the fund is negotiating a bulk rate for hundreds of thousands (or even millions) of members, and the insurer doesn’t need to complete costly underwriting processes for any cover that is automatically issued.
Paying for insurance through your super fund also makes budgeting easier, as the premiums are automatically deducted from your super account. That way, if your budget is tight, you don’t have to find extra money to pay for the premiums when they are due, although paying this way will eat into your retirement savings.
Another option is to make voluntary contributions to your super to help cover insurance costs. You can even claim a tax deduction for money you contribute, or get a co-contribution from the government if you’re on a low income.
4. Protection against bankruptcy
Holding your retirement savings in a regulated super fund generally means your super benefits are protected from creditors if you are forced to declare bankruptcy.
This protection can be important (particularly for small business owners and professionals) in the event something goes wrong with your finances. If your savings are held outside the super system, your bankruptcy trustee is free to use them to repay your creditors.
Any money you withdraw from super before you go bankrupt, however, is not protected.
5. Continuing insurance cover
Most large super funds allow you to continue your insurance cover when you switch employers or industries. Continued insurance is valuable if you have difficulty obtaining equivalent coverage with a new policy because of health issues that have come up since you first applied for insurance or are being insured for a large amount.
Even if you leave your super fund, many insurers offer you the option of continuing your existing insurance policy at your own expense by switching it over to a personal policy. You may also have the option to transfer your cover from the account you’re closing into a new super fund you’re joining. This allows you to keep the same level of cover without having to produce evidence about your health or medical history.
6. Ability to invest in bigger assets
Super also gives you the opportunity to access investments that wouldn’t otherwise be available to you, by pooling your retirement savings with other members in a large super fund.
With a bigger pot of money available, super funds can make investments that are impossible for individuals with smaller sums to invest, such as taking direct stakes in a motorway, office tower or wholesale investment such as corporate bonds. In fact, many of the big deals are never offered in the public market and are only available to large institutional investors like super funds and investment banks.
7. Use your super to save for your first home
If you need to build a deposit for your first home purchase, making voluntary contributions to super and using the First Home Super Saver (FHSS) scheme to withdraw your savings when you’re ready to buy could help.
Low tax rates on super contributions and a generous deemed interest rate work together to boost the amount you can accumulate.
The great news is that, unlike many other first-home buyer schemes, the FHSS is available even if you’re buying with a partner who has owned property before.
The bottom line
While these lesser-known perks can help you get the most out of your super fund, it’s also important to make sure you’ve got the essentials under control, so be sure to check our tips to boost your super when time is on your side, when retirement is approaching, and in retirement.
