Description
This 3-part insurance in superannuation series is designed for all financial services professionals that have clients who have or are considering insurance in superannuation. Throughout these sessions, we will cover some of the key superannuation, insurance and estate planning matters that must be considered for clients.
Part 1 – Funding insurance in super: strengths, weaknesses and the regulator’s view
This session covers the pros and cons of structuring insurance through superannuation and the types of clients it may benefit.
We work through issues to consider to ensure a client’s insurance is structured in their best interest from a holistic view encompassing the broader superannuation and advice regime.
By participating in this training, participants will be able to:
- Compare and contrast the key strengths and weaknesses of insuring inside superannuation, including the restrictions within superannuation, the taxation treatment of the funding options and estate planning tips to consider
- Analyse the strategies and opportunities available to clients insuring inside superannuation, including how death benefit pensions can provide tax free withdrawals (above minimum) irrespective of age, and
- Recognise the regulator’s view and the steps required when making a recommendation to pay for insurance from superannuation.
Part 2- SMSF insurance strategies
As the SMSF sector continues to grow, there has never been a more important time for trustees to consider life insurance as part of their investment strategy. We focus on the practical insurance tips and traps that advice providers need to look out for when helping clients establish their SMSF, from structuring insurance inside the fund to paying out benefits and outline key insurance strategies to consider for SMSFs.
By participating in this training, participants will be able to:
- Identify the key insurance issues that clients must consider before setting up an SMSF and discuss the most practical way to document their decision
- Explain the basics of policy ownership, payment of premiums and allocation of proceeds
- Analyse insurance strategies to consider for SMSFs (and other superannuation funds)
Part 3- Managing the SMSF liquidity problem
There are many risks an SMSF faces when majority of its funds are held in one asset such as property, particularly when an LRBA is used to acquire the asset. With the ATO raising concerns about SMSFs and the lack of investment diversification, clients with ‘lumpy’ illiquid assets must give proper consideration to diversifying their fund’s investments or ensuring the fund has enough liquidity to safeguard the fund’s assets.
This session will consider how insurance can play an important role in providing liquidity to an SMSF when paying a death benefit from the fund. Included is a discussion on why SMSF trustees should start with the end in mind and how insurance can provide a platform for a robust exit strategy following the death or disability of a fund member. We also consider the challenges with unrelated business owners in SMSFs and address their options in the event of death or disability.
By participating in this training, participants will be able to:
- Analyse the ATO’s approach to SMSF investment strategies and whether clients meet the regulatory requirements
- Discuss and address the difficulties that may be encountered on the death or disability of a member particularly when a SMSF has illiquid assets and/or a LRBA
- Identify the value for clients of including insurance as part of their SMSF investment strategy for liquidity purposes.
Recorded on 2022
Presented by Natasha Panagis
3 CPD point
