Life insurance inside your super

What a fund usually offers

Moneysmart describes three kinds of cover available through most funds.

• Life cover (also called death cover) pays a lump sum or income stream to your beneficiaries when you die or have a terminal illness.
• TPD cover pays a benefit if you become seriously disabled and are unlikely to work again.
• Income protection (also called salary continuance cover) pays a regular income for a set time if you can’t work because of illness or injury: for example two years, five years or up to a certain age.

Some funds also give income protection automatically. Trauma cover is the exception: super funds no longer offer new trauma policies.

The conditions that switch cover on and off

Default cover is not permanent. Moneysmart sets out the points at which it starts or ends, and they are easiest to read in order.

1. Joining under 25Cover does not start automatically for a new member under 25 unless you ask your fund for it, or you work in a dangerous job and your fund gives automatic cover (which you can cancel).
2. A balance under $6,000The same opt-in rule applies while your balance is under $6,000. If you already had cover and your balance later falls below $6,000, you usually keep it. (Figure as read on Moneysmart, October 2026.)
3. 16 months with no contributionsBy law, funds cancel insurance on accounts that have received no contributions for at least 16 months. Your fund will contact you before the cover ends; to keep it, tell the fund or add money to the account. Some funds also cancel cover if a balance is too low.
4. Around 65TPD cover in super usually ends at age 65, and TPD bought outside super usually ends at 65 too.
5. Around 70Life cover in super usually ends at age 70. Outside super, you may be able to keep life cover for as long as you pay the premiums.

The law behind the opt-in rules

The under-25 and low-balance rules come from the Treasury Laws Amendment (Putting Members’ Interests First) Act 2019, which APRA says commenced on 3 October 2019. It requires fund trustees to stop providing insurance on an opt-out basis to members with balances below $6,000 and to new members under 25. It builds on the Treasury Laws Amendment (Protecting Your Superannuation) Act 2019, passed in March 2019. APRA also notes that a trustee may choose to adopt a “dangerous occupation” exception, which exempts certain members from these rules.

Weighing it up

Moneysmart lists both sides. Neither column is a recommendation; together they explain why default cover suits some members and not others.

Moneysmart also warns that if you are over 60 or have a pre-existing medical condition, you may not be able to get the cover you want, so it suggests checking your insurance before changing funds or closing an account.

Checking what you hold

You can call your fund, log in to your account online, or read your annual statement and the fund’s PDS. Moneysmart says you will usually be able to see the type of cover, how much you have, what you pay in premiums, and when the cover ends or can be cancelled. The fund’s PDS names the insurer and sets out what is covered and the claim rules.

• More than one account. You may be paying premiums on more than one policy, and depending on the policies you may not be able to claim the full benefit from more than one.
• Loadings. A loading is a percentage added to the standard premium for people the insurer sees as higher risk, for example because of a high-risk job, a pre-existing condition or being classified as a smoker. If your fund has classified you incorrectly, Moneysmart suggests contacting it.
• Tax. The ATO says you can’t claim a deduction for income protection held through super where the premiums are deducted from your contributions.

How much default cover is enough is a separate question, covered in how people estimate how much life cover they need.