Six-member funds will allow SMSFs to better pay for life insurance cover and retain any associated benefits for more members.

Disabled members will not automatically meet the TPD definition for tax purposes despite satisfying both the underwriter and SIS Act definitions, an SMSF technical expert warns.

An SMSF specialist has suggested a split total and permanent disablement insurance policy can allow cover to be held in the fund while ensuring policy definitions not allowable under super law are contained in it.

Any transfers of risk insurance from an individual to an SMSF must be legitimate due to the severity of penalties resulting from breaches related to these transactions.