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Insurance through Super: What You Need to Know

Unless you’re starting a new job, getting ready for retirement or rolling over your numerous funds from previous employers, your mind probably isn’t on your super. You might not even be aware that your fund provides you with insurance to cover you if you cannot work. However, paying attention is a good idea so that you can understand the potential benefits and the potential drawbacks.

Why super insurance should be talked about

Most superannuation funds come with insurance attached which will cover you if injury or illness renders you unable to work. Like other insurance policies, this comes with premiums which in this case will be deducted from your super balance.

Before you change or consolidate funds, it’s worth checking that you can get the insurance cover you want through your chosen super. Importantly, if you change funds and insurance, you may not be covered for things you were previously, so strong financial advice is key.

There are many benefits to getting your life insurance through super: it can be cheaper, it covers you even if money’s tight and it’s easy to manage, with automatically deducted premiums out of your super savings. However, it can also have drawbacks: cover can be limited, payments can be slower and payments can end at around age 65. 1

Which types of insurance do super funds offer?

Super funds typically have three types of insurance for members. Most automatically come with benefits for Total and Permanent Disability (TPD) and Death. Some also include Income Protection, which pays you for a specified period if you can’t work due to temporary injury or illness. These payments are funded by a separate insurance policy and won’t be taken out of your retirement savings.

Can I claim?

Not all insurance policies are equal, and many have different terms and conditions that may make it more or less challenging to access benefits. Some may not even cover you at all.

If you have other insurance policies it doesn’t necessarily render you ineligible to claim. For instance, it’s possible to make multiple TPD claims across different funds and policies. If you claim for income protection you might be eligible for a top-up benefit as long as you’re not being paid around 75% or more of your income from another source. You can’t claim a total amount beyond your usual income.

If you’d like to make a claim, Shine Lawyers will take your circumstances into account and work with you to prepare your claim.

What if I’m receiving other benefits?

You can still make a super insurance claim if you’re receiving other benefits like worker’s compensation or motor vehicle accident compensation. A TPD lump sum payment isn’t usually offset against statutory benefits, but income protection is.

Contact us if you’re unsure of how receiving other benefits may impact your superannuation payment.

How can Shine help?

Shine Lawyers are super and disability insurance experts who can answer any questions you may have and help you get the most out of your super. If illness or disability has stopped you from being able to work, contact us. We can help you access benefits through your superannuation, life insurance or other insurance policies:


Written by Shine Lawyers. Last modified: October 22, 2018.

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