Review Your Insurance In Super

What Is It?

Most Super funds will come with a default amount of Life cover and Total Permanent Disablement cover. Some also come with Salary Continuance also known as Income Protection.

It’s important to recognize that:

The Insurer is a different company than your super fund

You can tailor your cover, choose a different insurer or choose to have no insurance at all.

Tailoring your cover to your needs is an essential part of financial planing

What Does It Cover?

Life insurance will pay a lump sum benefit to your beneficiaries if you pass away.

Total Permanent Disablement cover, as the name suggests, will pay a lump sum benefit to you if you are deemed permanently disabled. This usually means unable to ever work again. However, the ease of meeting the TPD definition in order to claim varies considerably from policy to policy and should be a major consideration when deciding on a policy. One of the most important features to decide on is whether to get an ‘any occupation‘ or ‘own occupation‘  TPD definition. 

Any Occupation – You need to be disabled to the point that you cannot perform any occupation.

Own Occupation – You need to be disabled to the point that you cannot perform your own occupation.

Salary Continuance will pay a portion of your salary (Usually up to 75%) to you if you have been put out of work due to illness or injury. They don’t cover redundancy.

Although there are a number of different policy features in the market, the 3 core components of salary continuance are:

The waiting period – The period between when you stop work and start receiving the claim. Usually 30, 60 or 90 days.

The benefit amount – The monthly amount you receive while you are on claim. Usually up to 75% of your pre-tax salary.

The benefit period – The maximum length of time you can claim for. Usually 2 years, 5 years or to age 65.

Do I Need It?

Insurance needs vary from person to person and the answer to this question is totally unique to you. It depends on your situation and your appetite for insurance generally.

When assessing whether cover is appropriate for you it can be helpful to think about what you and your family would need financially if a claimable event were to occur. For example: Consider the following situations and your need for cover if they occurred:

If you were to pass away would your family need any financial assistance to carry on?

If you were to become permanently disabled do you and your family have the financial resources to support you?

If you lost your job would you be able to cover your living expenses?

How Much Cover Should I Have?

The best approach is to go through an insurance needs analysis. This doesn’t necessarily need to be a formal assessment. The core idea is list out the items that you want to have covered in the event of a claim. For example: 

In the event of death someone might want to have all their debts paid out and extra provisions to cover funeral costs.

Another person may wish to cover this plus their children’s future education expenses.

Another may want to cover both of these plus cover their salary until their children are likely no longer to be financially dependent e.g. 50% of salary * 10 years (years until kids are past 18). 

There is no right answer for everyone, it depends on your own circumstances. If you need assistance determining an appropriate amount of cover for your situation then you should consider discussing this with a financial advisor.

How Much Does It Cost?

The premiums will vary considerably from person to person. Insurers try to price their premiums based on your risk of claiming. The typical questions to generate a quote are:

Age, Gender, Occupation, Smoker status and Cover amounts. Upon application there will also be an assessment of medical history to determine if further loadings or exclusions are applied.

How Do I Compare and Choose a Different Insurer?

Unfortunately your super fund will be unlikely to assist you with this as they only have arrangements with their selected insurer.

A broker or financial advisor will be able to compare insurers and recommend one based on your needs.

Click ‘Get Quotes’ below to receive a quote from a qualified advisor on insurance.


Most people will have Life, Total Permanent Disablement (T.P.D) cover and sometimes income protection (salary continuance) insurance in their super.

What most people don’t know is, that you don’t have to stick with this default cover. You can adjust your insurance cover amounts, to whatever amount is appropriate for your situation and you can cancel it altogether if you don’t need it.

Nearly all the super funds are not insurers. The insurance in super is insurance cover provided by an external insurer. You’re not obligated to be with this insurer. You can compare the wider market of insurers and select the insurer that’s providing the most suitable cover for your situation to be funded via your super.


What type of cover and how much cover should I have?

This really varies from person to person. Some people require a lot of cover and some people might not need any.

For example:

Someone with a mortgage, children and who is the main income earner for their family will generally require a lot more cover than a single person with no debts or financial dependents.

The single person if financially independent may still want to consider T.P.D and income protection to cover themselves in worst case scenarios. However, they may not need life cover and less T.P.D and income protection.

The thing that’s important to think about is, if something did happen to you how much cover would you need? It’s helpful to put yourself in the shoes of your potential future-self following a claimable event.


Situations to consider?

What if:

– you were to pass away how much cover would your family need?

– you became Permanently disabled how much would you need as a lump sum to support, you and your family?

– your income stopped today due to injury or illness, how long could you survive?

The answers to these questions are unique to everyone. It’s best to have a good think about how these apply to you.


Which Insurer should I be with?

Insurers specialise in different demographics of people such as occupation, age, gender, smoker status and medical history. So, it’s important to compare all the insurers to ensure you’re getting the best cover for your situation.


What to do next?

If you’re unsure about what amount and type of cover is appropriate for you or which insurer to be with then we recommend you seek advice. We can provide automated advice through the Digital Advice tool or contact us to book a consultation with a financial advisor.