3 benefits of insurance cover through your super fund

More than 70% of Australians with life insurance have it through their super fund1. Find out more about the benefits of insurance through a super fund compared to other providers.

When you join a super fund, you usually receive a basic level of insurance cover. At AustralianSuper, for example, eligible members receive age-based Death (also known as life insurance), Total & Permanent Disablement (TPD) and Income Protection insurance cover.

More than 70% of Australians with life insurance have it through their super fund.

If you don’t have insurance cover through your super fund, you may have opted out when you joined, or chosen an account that doesn’t offer insurance or automatically provide a basic level of cover.

There can be great advantages to having insurance through your super – including lower premiums (costs) and a better outcome when making a claim. 


A simple way to manage insurance cover

If you join a super fund and you’re aged 25 or over and have an account balance over $6,000, you'll usually receive a basic level of insurance cover without providing health information. You may need to answer detailed health questions (for the insurer to consider) if you want to apply for more cover than the basic cover offered by your super fund, or if your job requires a higher level of cover due to the type of work you do.

One of the biggest benefits of having insurance through super is knowing you’re covered if you’re injured or ill and can’t work.

Applying for cover directly through an insurer can require answering questions about your medical history and pre-existing health conditions. This could mean you pay more or are not covered at all. 



3 benefits to insurance through your super

1. Hassle-free insurance payments

If you have insurance cover as a member of AustralianSuper, your premiums (the cost of your cover) get paid directly from your super balance. That means you don’t have to pay for insurance from your take-home pay.

2. Potentially cheaper insurance premiums

Super funds often provide cheaper insurance cover due to the number of policies they purchase. As Australia’s largest super fund, AustralianSuper works with our insurer to negotiate discounted group rates for all members who have cover through us. As an industry super fund, we don’t pay commissions to our insurance provider. These savings go to members.

3. Payments direct from your super are financially savvy 

Paying for insurance cover directly through your super, not out of your pocket, could mean you pay less tax on your insurance charges. You’re taxed 15% on your employer’s super contributions (or if you’re making contributions through salary sacrifice), which is lower than the marginal tax rate on most people’s take-home pay. 

On the other hand, if you’re paying for insurance directly with an insurer, it’s out of your take-home pay, so you’re probably missing out on tax savings.


More claims accepted, fewer disputes and quicker processing

In October 2020, the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) released the results of 12 months of research into insurance cover.

The Life Insurance Claims and Disputes Statistics research found that life insurance through a superannuation fund often results in more claims being accepted, fewer disputes and faster processing times compared with insurance purchased directly through an insurer.

The following table shows comparisons taken from the research, which you can explore using the Australian Government’s Life insurance claims comparison tool.

Insurance claims paid out through super vs insurance companies

 Life Insurance Super Fund (average) Direct from an insurance (average)
Claims accepted rate 98.1% 88.9%
Average claim time (months) 1.0 2.9
Disputes (per each 100,000 people insured) 0.9 13.4
Income protection Super Fund (average) Direct from an insurance (average)
Claims accepted rate 95.7% 84.5%
Average claim time (months) 2.3 1.6
Disputes (per each 100,000 people insured) 46.7 173.6
Source: moneysmart.gov.au, Life insurance claims comparison tool.

As you can see, Death cover (Life insurance) and Income Protection cover claims have a 9% and an 11% higher acceptance rate respectively through super funds compared to retail insurers.  

Processing of death cover claims happens in around a third of the time, and the number of claims disputed is significantly lower with both types of cover. 

Choosing the insurance cover that’s right for you       

AustralianSuper offers 3 types of insurance cover to members:

  • Death cover (life insurance),
  • Total & Permanent Disablement (TPD) cover, and
  • Income Protection cover.

If you’re not sure you need insurance cover, what type of cover is right for you or how much you need, you can speak with a financial adviser or use the free Insurance Calculator to work it out.   

Reviewing your insurance 

It’s good to review your insurance cover every 12 months or after big changes in your life. For example, if you get a raise in salary at work, you might want to increase your income protection cover to suit. With AustralianSuper, you can apply to increase your insurance cover. You may need to provide detailed health information for the insurer to consider. You can also change or cancel your cover anytime through your online account or the easy-to-use mobile app.




1. moneysmart.gov.au -Insurance through super
2. moneysmart.gov.au - Life insurance claims comparison tool


This information may be general financial advice which doesn’t take into account your personal objectives, situation or needs.  Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898. 

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