Holding insurance in super can help protect you and your family financially if something unexpected happens.
What is insurance in super?
Insurance in super is insurance cover held inside your superannuation account. Commonly, this may include life insurance, total and permanent disability (TPD) insurance and income protection. Because premiums are paid from your super balance, insurance in super can provide protection without requiring additional payments from your income.
Many people receive ‘default’ insurance automatically when they join a super fund, though cover levels and types may vary. Understanding your insurance benefits can help ensure your cover aligns with your needs.
Types of insurance
There are several types of insurance typically available through superannuation funds:
- Life insurance, which can provide a benefit to your dependents if you pass away
- TPD insurance, which may apply if you become permanently unable to work
- Income protection, which can help replace a portion of your income if illness or injury temporarily prevents you from working
Not all funds offer every option, and terms can differ depending on the insurer and policy rules.
Why insurance matters
Insurance is designed to provide financial protection at key life events, helping manage risk.
Protection for dependents and family
One of the key benefits of holding insurance in super is providing financial support to dependents if you are no longer able to provide for them. Life and TPD cover held through super can help cover debts, living expenses or future costs.
Income security during illness or injury
Income protection can play a crucial role if you are temporarily unable to work. While benefit levels vary and waiting periods apply, this type of cover can help maintain income during recovery.
Cover without extra hassle
Insurance in super can be simpler to manage than holding multiple standalone insurance policies. Premiums are deducted automatically, and cover is usually linked to your super account, reducing administration.
How insurance in super works
Insurance in super is funded by premiums deducted from your super balance. This means insurance costs can reduce your retirement savings over time, which is why reviewing cover regularly is important.
How to make changes to your insurance
Most funds allow members to increase, reduce or cancel cover, subject to conditions. Changes may require health information depending on the request. If your circumstances change, reviewing your options and understanding how to make updates through your fund’s insurance change process can help ensure your cover remains appropriate.
Insurance needs and costs calculator
An insurance needs and costs calculator can provide general guidance by estimating premiums and cover levels based on your inputs. Australian Ethical offers an online insurance calculator to provide these estimates.
Insurance in super can provide accessible cover, though suitability depends on personal needs and circumstances.
It depends on the type of cover you have, but commonly includes life, TPD and income protection.
Yes, though conditions and eligibility criteria may apply depending on the change. You should seek professional advice before making any changes to your insurance cover.
We recommend you seek financial advice to consider your insurance needs before making any changes to your insurance cover. This information is general in nature and does not take into account your individual objectives, financial situation or needs. Before making a decision, consider whether it is appropriate for your circumstances and read the Financial Services Guide and relevant Product Disclosure Statement.