Update your Life and Super Policy Beneficiary Nominations
Nominating a person as your life insurance beneficiary (or super fund payout beneficiary) sounds straightforward. Not getting this right usually results in legal challenges and animosity between claimants at the most stressful time of their lives. Knowing this is already properly completed can bring peace of mind and greater certainty of who should benefit from your backup plan, and who should not.
Are you one of the many people who have lost track of their beneficiary information?
Do you have an existing Life Insurance policy or perhaps a Super account with its own insurance you've lost touch with?
- Maybe you haven’t nominated a beneficiary to your life insurance policy or super fund account?
- Have you forgotten who you did nominate and now need to update your wishes?
- Did you nominate a previous partner from a past relationship and now need to (urgently) update your nomination instructions?
- Have you recently divorced or separated, or
- You may have forgotten a binding nomination needs to be renewed every three years?
If this sounds like you, it sounds like you could benefit from our Update My Life & Super Beneficiary Nominations Service.
Understanding how to keep track of your insurance policy nominations can feel a little like rocket science
You probably already know when you take out a typical Life Insurance policy, you have the option to nominate anyone you like as the beneficiary(s) to the policy, so they can receive any future payout if you unexpectedly pass away.
- Standard Life insurance payouts are usually paid tax-free to your nominated beneficiary.
But did you know that if the Life Insurance policy is paid from a super fund, you are restricted to who you can nominate as a beneficiary, and there may be significant taxation complications too?
- Super Life insurance payouts are taxed unless the person you nominate is an eligible beneficiary under the tax laws.
Pro Tip: Did you know that if the Life Insurance policy is paid from a super fund, you are restricted to who you can nominate as a beneficiary, and there may be significant taxation complications too?
Making a beneficiary nomination is separate from making a Will
Making a beneficiary nomination is something you can do today that will make a significant difference to your loved ones. It can give your chosen beneficiary a level of protected financial security outside the reach of any relatives and biological family members who may try and challenge a Will and seek to erase your partner's rights.
- If you're one of the 76% of Australians who don’t yet have a Will, the government usually appoints an administrator and applies its own set of rules (called Rules of Intestacy) to decide who gets what in your estate – and you probably won’t like those rules.
- To make matters worse these Intestacy laws are not uniform Australia wide so it’s a bit of a hit-and-miss affair and can become a source of heartache and sorrow for the modern Australian Family.
Why everyone needs to make a beneficiary nomination
Most people know that a Will takes care of your estate assets; like a house, vehicle, personal assets, and artworks and collectibles etc.
- What many people often don’t know is that Life insurance payouts and Super account payouts are usually considered non-estate assets and therefore do not form part of your Will and the assets it controls.
This means if something does not form part of your estate, it's not covered by your Will — and cannot be challenged with your Will.
Important:
A Life Insurance policy or Superannuation account, with a nominated beneficiary, can provide an inheritance direct to your loved ones. This is because beneficiary nominations are non-estate assets and legally binding documents outside a challenge to a Will.
Who can I nominate as my Life Insurance beneficiary?
Anyone you want.
Who can I nominate as my Super Life Insurance beneficiary?
Your super can only be paid out to an eligible beneficiary.
An eligible beneficiary is either a dependent, a financial dependent or your legal representative (ie: the Executor of your Will or Administrator if you have no Will, for your estate).
- Dependents can include your spouse or de facto partner (regardless of gender), your children (biological, adopted, step and ex-nuptial), or someone (regardless of gender) with whom you have an interdependency relationship. In most cases, siblings are not considered dependents for super purposes unless financially dependent upon you.
- You can also leave your super to a financial dependent, which may include someone who relies on you to meet daily living expenses such as rent, utilities and household outgoings. This also covers anyone who shares your major financial commitments such as mortgage
Pro Tip: To be able to prove a person is financially dependent upon you and eligible to receive your super death payout tax free, they have to show they are ‘financially dependent' upon you - at the time of your death.
Without expert assistance from the specialists at Sapience Financial, this can be very difficult.
Where there’s a Will, there’s a relative
- It’s fair to say, not everyone behaves their best when facing grief, and money.
Why do people need a beneficiary nomination service?
Life is busy and navigating relationships can be complicated.
Add to this the ever-changing tax laws and you can accidentally find yourself leaving a Life Insurance policy payout to someone you no longer want to. And you can also forget to make allowances for the potential tax bill involved.
- Relax. We have a solution for these types of problems.
Getting your beneficiary nominations sorted is just one more thing you can do to bring more certainty and equality to your relationships, and at Sapience Financial, we’d love to help you with that. #LoveTakesAction
How we can help
Nominating a policy beneficiary (and updating it as needed) is an important part of protecting your personal financial situation and your family.
Contact us for a confidential chat about your needs.
