How does insurance through super work?

Your superannuation is more than just a retirement fund. More often than not, they hold important insurances to help if something serious happens and you’re not able to work in your usual job (like life insurance or disability insurance).

Insurances through your super fund can provide comfort and protection. But if you’ve never looked at it or don’t understand how the insurances work, you might potentially miss out on making a claim or make things tricky if you ever need to make a claim.

We’ll explore what insurance is included in your super, and what you need to do to make sure your policy will work for you, if the day ever arrives when you need it.

How does superannuation insurance work?

Most super funds automatically enrol members in:

• Total and permanent disablement insurance (TPD) – TPD insurance can pay you a lump sum if you’re unable to work due to an injury, illness or a medical conditionn, like schizophrenia, fibromyalgia, or cancer. In modern years, there’s also been a spike in TPD claims for mental health concerns.

• Income protection insurance – This is another policy commonly offered by super funds, that helps cover your income for a set amount of time if you temporarily can’t work due to disability or illness.

• Life insurance – Also known as death cover, life insurance can pay a lump sum to your family if you pass away.

• Trauma insurance – This functions similarly to TPD insurance, where you can receive support if you’re diagnosed with a specific illness or injury that meets the policy conditions.

Our tips to making sure your insurance through super will work for you:

• Ask questions about your policy from your super fund and have them confirm in writing, so you can refer to it at a later stage if needed

• Talk to a financial advisor about your insurance and ask what is included or excluded, to ensure it includes the things that matter most to you.

What’s included in a life insurance policy?

With all the product disclosure statements and policy documents you’re given, insurers don’t make it easy to know what’s included and excluded.

Sometimes, the easiest thing to ask is what’s not included.

Life insurers are well within their rights to reject claims based on their strict exclusion clauses that are often buried deep in your paperwork. So it’s important to go through your policy documents and find those and make sure you understand their exclusions and what they mean for your personal situation.

Again, we recommend asking questions about the policy from the provider and have the response in writing, so you have a record to refer back to if needed.

If you’re researching life insurance inclusions, it’s worth remembering that if you or someone you know is in crisis or needs support, help is available. You can contact Lifeline at 13 11 14 (available 24/7) or visit the Lifeline Australia website.

Can you be denied a life or TPD insurance payout?

Ultimately insurers are businesses, so they make decisions on claims based on their interests. Data released for December 2025 showed that:

• 2.5% of finalised life insurance claims were initially denied

• 10.3% of finalised TPD insurance claims were initially denied.

But across both life and TPD insurances, in a majority of those cases, disputes were able to either overturn the decision or reach another conclusion (like partial or undisclosed settlements).

All of that said, there are valid reasons why they can delay or deny your claim. Those might include:

• the policy had lapsed due to non-payment

• the medical evidence didn’t meet the policy requirements

• the policyholder didn’t meet the employment requirements

• the policyholders’ cause of death or injury wasn’t covered by the policy

• the insured person forgot to include life or TPD insurance within their policy

• the insured person didn’t disclose a condition to the insurer, with the condition contributing to their claim (or they were already excluded due to a pre-existing condition).

What we’ve learned over the years is that insurers denying claims happens quite a bit, and it isn’t necessarily the end of the road. Our superannuation and insurance experts can offer you no-obligation legal advice regarding your situation and whether you can appeal your insurer’s decision.

Can you have multiple insurance policies?

In Australia, you’re allowed to have multiple life or TPD policies at once. But you have to disclose each policy to each of your providers.

So if you want to make sure you’re covered by having slightly different services with slightly different conditions, you can. But if you don’t tell each provider what you’re doing, you run the risk of your claim being denied.

With each insurance policy offering a slightly different service, it’s easy to consider simply taking out multiple policies to avoid any gaps in coverage.

Know your insurance, know your rights

When tailored to fit your needs and lifestyle, insurance through super can offer valuable peace-of-mind. This is why it’s important to have the right coverage in place, so you’re protected in the event you find yourself unable to work due to injury, illness or disability.

Our tips:

• Check the fine print to ensure you’re covered for what you think you are.

• Keep up-to-date on any changes that your policy holder makes to your insurances and ensure you update them when any circumstances in your life change.

• Seek legal advice if you need help. While you can lodge a claim for your insurance benefits yourself, the insurance industry is notorious for making the process difficult and have their own lawyers to provide advice on the best way to deal with your claim. There are a number of benefits to having a lawyer run your claim, but simply put, a lawyer can help you to understand your rights, access your full entitlements and receive them as quickly as possible.

Shine Lawyers – we’re here to help

If your ability to work has been impacted by illness, injury or disability, help is available.

Our team of Superannuation and Life Insurance claim experts can help you or your loved ones to understand your policy and assess your unique circumstances to advise exactly what you're entitled to. Our expert team will guide you through each step of the legal process on a No Win, No Fee basis and help you to seek your full entitlements and resolve your case as quickly as possible.

Getting started is easy with our Online Claim Checker below - a simple, free tool to help you check whether or not you have a valid claim, or you can call us today.