Life insurance through your super

When it comes to putting life insurance in place, there is a lot to consider. From how to access coverage to the types and levels of insurance that may be right for you, it’s important to understand your options. 

Having the appropriate life insurance can provide financial support if you become unwell or injured, as well as help take care of your loved ones when you’re no longer around. 

What types of life insurance cover are available through your super? 

Your super can offer convenient and competitive life insurance solutions. Depending on your age and account balance, cover may have automatically been provided when you joined. 

Here are a few different types of cover that may be available, including: 

• Death cover: Provides a lump sum payment to your loved ones if you pass away or are diagnosed with a terminal illness. 

• Total and Permanent Disablement (TPD) cover: Provides a lump sum payment if you become permanently disabled. 

• Income Protection (IP) cover: Replaces part of your monthly income if you’re temporarily unable to work due to illness or injury. 

The benefits of life insurance through super 

Super funds usually arrange cover for a large group of people, which might allow them to offer lower premiums compared to individual policies. However, this can depend on your fund and a range of factors, including your individual circumstances. 

When you join a super fund, you may automatically have cover without needing a health check. Conversely, if you were to apply for life insurance independently, you might need to provide personal information about your health, lifestyle, and occupation. 

Having insurance through your super also means premiums are paid directly from your super account, which can help avoid impacting your monthly cash flow. 

What else do I need to consider? 

Before deciding whether insurance through your super fund is right for you, consider the following: 

• The types of insurance and levels of cover available may be limited, and certain exclusions may apply. Because cover isn’t tailored to your individual circumstances, it’s important to assess your specific needs. 

• Recent changes to the law may affect how insurance through super is provided, potentially resulting in your cover being switched off unless you inform your fund you wish to keep it. 

• Premiums deducted from your super will affect your overall account balance, which could impact the amount available for retirement. 

Getting the right cover 

If you’re unsure about your existing cover or whether it suits your needs, you can contact your super fund at any time. There may be options to adjust your insurance, such as increasing or decreasing your level of cover, or applying for different features or benefits. 

Many resources are available to help you make an informed decision about your life insurance. A good place to start is ASIC’s MoneySmart website, which provides information on a range of financial topics.