Generally, your SMSF can provide insurance for members for an event that meets a conditions of release including death, terminal medical condition, permanent incapacity and temporary incapacity.
As part of creating an investment strategy, your fund must consider insurance. This does not necessarily mean it needs to be purchased but it must be considered. You can take out a range of insurances in your SMSF including:
- life insurance
- total and permanent disability (TPD) insurance
- income protection
- terminal medical condition insurance
Other types of cover including trauma insurance cannot be purchased using your superannuation and must be taken out personally.
It's important that any new policy in your SMSF is in place before you cancel other policies you have, including policies in your previous super fund. This protects you from missing out on insurance if there are delays or other problems with the new insurer accepting your SMSF's application. So if you are transferring your whole balance from your old super fund to your SMSF, make sure you arrange for your new insurance to become effective before cancelling.