Investment of Property through SMSF

Any sort of method related to enriching thriving wealth would necessitate insurance. It serves as a vital component and make sure that you and your loved ones will be taken care of in any misfortunate event such as sickness, accident or even death.

Available Insurance

  • In case of death, the life insurance will help your family to cope for your loss through financial means.
  • TPD insurance or Total Permanent Disability would help provide financial security for the family. This can be used during any sort of long term leave from work due to an illness or injury.
  • Trauma will be used to give you the money to help in covering for medical and other related costs that may happen if in case any trauma occurs.
  • Cover for income protection that can help with regular income if in case you will not have the capacity to work momentarily as caused by an injury or illness.

It is likely that you already heard or already have any of the above insurance mentioned. It is a good thing having the insurance above as it can cover the needs of your family should any unfortunate event happens.

Tax Deductibles

It is possible to have an insurance policy that can hold income protection with SMSF as the name. Yet with the marginal tax rates of a person that can be over 15% of the tax paid in a SMSF, it can be more tax effective to have the policy in individual’s name.

Insurance matters for property investments and debt

With SMSF having the capability to borrow and invest in residential and commercial property through a structure of installment warrant, there is an increasing need for insurance as well. This is because of the huge percentage of assets by SMSF linked to one investment like the lack of liquidity.

Lack of liquidity can be a major concern if a member turns out to be disabled, death or not able to work for quite some time.


Since there is a must for SMSF inside and outside, there is also a requirement to make sure that insurances can be held by the SMSF.

Trust Deed: SMSF trust deed should be assessed so as to see if it can hold the policies of life and TPD. This is on behalf of the members. Most SMSF trust deeds that can be obtained in the market permit holding of insurance policies. Learn more:

Having an existing SMSF may necessitate you to review your deed. This is regardless if you have an existing insurance policy under the name of the fund.

Minutes and reserves of the trustee: If the insurance company pays the benefit to adhere life or TPD policy, they need to pay it to the account of the members within the SMSF.

For anyone who already has an SMSF or interested to have one, it matters to make an assessment of your insurance needs first. You also need the SMSF to get the proper insurance policies behalf of the members.

Gordon Buckland