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

The decision to hold risk insurance inside an SMSF must be determined by more than just the tax deductibility of the premium payments.

Trustees should seek strong medical evidence a member is incapacitated before allowing them to access benefits.

Rolling money from one super fund to pay insurance premiums in another will reduce the the level of tax deductions available for personal contributions.

SMSFs claiming a future service deduction on life insurance benefits should make premium payments regularly to ensure the deduction remains available.

Instances of SMSF members opting not to discuss their insurance needs should be recorded in their file notes rather than being glossed over to prevent later disputes.

The SMSF sector has not properly understood how life insurance premiums can be paid from a fund, which may lead to problems when benefits are paid.