Can I do that? Most people realise they can buy life insurance through their super fund. The smart operators also know it is more tax effective than buying it yourself.

However, there is less awareness of the benefits of buying other types of insurance through super. Both Total and Permanent Disability (TPD) and income protection insurance have been available for some time and a recent tax office draft determination may allow funds to offer trauma insurance with more certainty.

So should I just buy the lot through my fund? Not necessarily, says Kevin Smith, a director of The Professional Super Advisers. While you should be able to get a better price through your super fund, thanks to its ability to negotiate group discounts, the tax and regulatory treatment varies.

TPD insurance (which pays you a lump sum if you're totally and permanently disabled) is often packaged with standard life insurance. As with life insurance, Smith says the costs of TPD insurance are deductible to your super fund whereas they are not deductible if you buy the insurance yourself. (There's also the benefit that many super contributions are taxed concessionally, so your premiums can be paid with pre-tax dollars.)

The catch is that it can be difficult to get the money out. Smith says TPD policies have different definitions of disablement. Some pay out if you are unable to work in your own occupation, whereas others require that you be unable to work in any occupation. The former is obviously more attractive but under the super laws you must meet a condition of release to receive a super payout before your preservation age. Disability is a condition of release but only if you meet the tougher test of being unable to work in any occupation.

So if you've chosen the more generous definition, you could find your super fund receives your insurance payout but you can't get your hands on it until you reach retirement age.

Smith says another twist is that TPD benefits are not automatically tax-free when paid from your super fund, even though they are tax-free outside super.

He says a formula applies based on how long you've been in the fund and your "future service period" - or how long to your normal retirement age, generally 65. The proportion relating to that future service period is the tax-free amount.

For example, if you're 45 now and have been with your fund for 10 years, two-thirds of your TPD payout would be tax-free and one third would be taxable. But if you were 64 and had been with your fund for 30 years, the majority of the payout would be taxable. Arguably though, says Smith, the need for such insurance reduces as you get older.

Am I better off just having income protection or trauma insurance? These policies cover you for a wider range of conditions but there is less incentive to buy them through super, unless the cost savings are there. The cost of income protection insurance, which pays you a regular income if you can't work due to illness or injury, is tax-deductible whether you buy it through your super fund or by yourself. Benefits are taxed at your marginal rate.

Trauma insurance is less commonly offered, in part because of concerns it may breach the sole purpose test - a key super regulation. However the tax office has now released a draft determination saying it would not breach the test so long as benefits from the policy are required to go to the fund's trustee, remain in the fund until the member satisfies a condition of release and the policy is not bought to secure some other benefit.

Smith says he struggles to see why you'd buy trauma insurance through super. He says the premiums are not deductible either way and the risk of not being able to get your benefit out of the fund before retirement is even higher than with TPD insurance.

Trauma insurance gives you a lump sum if you are diagnosed with certain conditions - such as a heart attack or cancer. But to meet a condition of release before retirement, you must be permanently disabled or suffering from a terminal illness.