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Understanding insurance through your super – an introduction
Super isn’t just about saving for retirement; it can also provide an important insurance safety net.
Most Australian super funds offer default insurance cover when you join. This typically consists of life insurance (death cover), total and permanent disability (TPD) cover, and sometimes income protection.
Let’s take a closer look at how this works, and how insurance coverage via super can help protect you and your loved ones.
Insurance offered by super funds
Most super funds offer automatic insurance cover when you join. This usually includes some or all of the following types of cover:
Life insurance (death cover): Pays a lump sum to your beneficiaries if you pass away.
Total and permanent disability insurance (TPD cover): Pays a lump sum if you become permanently disabled and can no longer work.
Income protection (IP cover): Provides monthly payments if you're temporarily unable to work due to illness or injury.
These policies are funded through your super contributions, making them a convenient and often cost-effective way to access insurance.
The benefits of insurance through super
Taking out insurance via your super fund can be a cost-effective and convenient way to protect yourself and your loved ones. Many super funds negotiate group rates with insurers, allowing members to access life insurance, TPD cover, and sometimes income protection at lower premiums than they might find independently. This group buying power means you could enjoy substantial savings while still maintaining meaningful coverage.
Another advantage is how premiums are paid. Instead of coming out of your regular income, insurance premiums are deducted directly from your super account balance, helping you manage cash flow while staying protected. This setup makes it easier to maintain coverage over time, especially during periods of irregular income – a common challenge for freelancers, sole traders, and many other workers.
Accessibility is also a key benefit. Most super funds offer default insurance cover without requiring medical exams or detailed underwriting. This means you can often get coverage quickly and easily, even if you have pre-existing health conditions. However, it’s important to read the fine print and understand the terms – coverage levels, exclusions, and eligibility can vary between funds. If you're unsure, contact your super fund to clarify your options.
Do you have enough insurance cover?
Understanding the insurance cover you may have through your super is essential – not just for peace of mind, but for ensuring your cover matches your needs. While most funds offer similar types of insurance, the coverage amounts, premium costs, and value for money can vary significantly. Equip Super's new Insurance Needs Calculator can help you understand how much you need and how much it may cost.
Issued by Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr"), the Trustee of Equipsuper ABN 33 813 823 017 ("Equip Super"). The information contained is general advice and information only and does not take into account your personal financial situation or needs. You should consider whether this information is appropriate to your personal circumstances before acting on it and, if necessary, you should seek professional financial advice. Where tax information is included, you should consider obtaining taxation advice. Before making a decision to invest in Equip Super, you should read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product which are available at equipsuper.com.au. Financial advice may be provided to members by Togethr Financial Planning Pty Ltd (ABN 84 124 491 078 AFSL 455010) – a related entity of Togethr. Past performance is not a reliable indicator of future performance.
