SMSF practitioners should encourage trustees to make explicit decisions around life insurance, rather than just give it consideration, and then document those decisions.

SMSF trustees who have insured fund assets in their own name will be unlikely to be able to return insurance payments to their fund due to cap limits, an auditor has warned.

A gap in employment can reduce an income protection payment to zero if the policy is held within an SMSF at time of claim, an insurance expert has warned.

The proceeds of a successful temporary incapacity insurance claim cannot automatically be passed on in its entirety to the insured SMSF member.

Advisers with SMSF clients should review their professional indemnity cover to determine if there are any policy restrictions regarding those services.

Best SMSF practice would suggest trustees not rely only on the SIS Regulations to justify releasing member benefits as a result of incapacity.