Life Insurance - Pays a lump sum when you die (in many policies, the payment is brought forward if you become terminally ill and paid before you die).
Total and permanent disability insurane (TPD) - Pays a lump sum in the event you suffer an illness or injury that leaves you incapable of working for the rest of your life.
Income protection insurance - Provides a regular income (generally up to 75% of your previous work or business income) if you suffer an illness or injury that leaves you temporarily unable to work. Benefits are payable until you’re able to return to your normal work or until you reach any maximum age or payment period in the insurance policy.
SMSFs can no longer take out trauma insurance policies.
It’s important to make sure the definitions of terms such as permanent disability and temporary disability in your insurance policy match up with the superannuation rules. In fact, funds can no longer take out new policies where the definitions don’t line up