In regards to insurance in super there are 3 types you can have Life Total Permanent Disability Income ProtectionAll 3 are deductible for the fund which helps offset your funds earnings . If held personally only income protection is deductible , but this deduction is more valuable . Asides from this tax deduction the other major benefit to holding insurance in super is the premiums won ' t hurt your personal cash flow so you can save a emergency fund . The downside to having insurance in super is the policies have less features than their nonsuper equivalents . A common example is the occupation definition for TPD . In super Any occupation is the only option , where as if held personally own occupation is a potential option albeit more expensive . A type of insurance that isn ' t available in super but is very important is traumacritical illness . It pays a lump sum for events like heart attack , cancer or stroke . These conditions are not necessarily covered . This can ' t be held in super because it does not align with a condition of release like the other insurances do , thus if a policy paid out the money would be stuck in your fund .