Why Are Insurances Covered in Your Superannuation?

Benefits of Superannuation Insurance

When it comes to navigating retirement, superannuation plays a crucial role. Superannuation, or ‘super’, is designed to help individuals save for their retirement through investing contributions over a long period of time. Apart from the primary purpose of accumulating savings, superannuation also provides additional benefits such as insurance coverage. This post will explore why insurances are covered in your superannuation and the advantages it offers for both you and your family.

Understanding Superannuation

Before diving into the specifics of insurance coverage, it’s important to have a basic understanding of the superannuation system. Superannuation is a mandatory contribution made by employers on behalf of their employees to provide retirement benefits over the years you work. It is intended to ensure that individuals have enough savings to support themselves financially once they retire from the workforce. It was developed to take stress off the historical pension scheme which was Government funded and run.

What is included in Superannuation?

Superannuation typically consists of various portions, these include:

  • investment options
  • Superannuation fees
  • insurance provisions

Insurance coverage within superannuation is an added feature that offers protection and financial security to individuals and their families in certain situations. As this is an added feature, you will need to pay additional fees or ‘premiums’. It is, however, always good practice to make sure you check on these every few years to make sure you have the right level of cover.

Which insurances are generally included in superannuation?

There are three main insurances offered to your through your superannuation:

  • Life Cover  – Life Cover is also known as ‘term life insurance’ or ‘death cover’. This insurance means in the event of your death, your family or ‘beneficiaries’ will be taken care of.
  • TPD InsuranceTPD Insurance is where Super Claims Assist can help you. TPD Insurance is a lump sum payout from your super fund in the circumstance you are injured and no longer able to work. This money can help pay for medical bills, rehabilitation and support for your family. Claiming TPD can be a long and complicated process, however Super Claims Assist can help simplify your claim with a no win, no fee guarantee.
  • Income Protection Insurance – Income protection, whilst similar to TPD Insurance has a distinct difference. Income Protection only pays for a % of your lost income on a fortnightly or monthly basis.

Why Insurances Are Covered in Your Superannuation

Affordability and ‘Group Buying Power’

One of the primary reasons insurance coverage is included in superannuation is the benefit of affordability and group buying power. Superannuation funds pool together contributions from many individuals, which allows them to negotiate more favourable insurance premiums on behalf of their members. This group buying power enables individuals to access insurance coverage at more competitive rates compared to purchasing standalone policies. This is why it is usually connected to your Superannuation account.

Automatic Coverage and Ease of Application

Another advantage of having insurance within superannuation is the automatic coverage it provides. Most super funds automatically provide members with a default level of insurance cover without requiring medical assessments. This streamlined process makes it easier for individuals to obtain insurance protection without the need for extensive paperwork.

Protection for Unforeseen Events

As we know, life is unpredictable, and unexpected events can have significant financial consequences for individuals and their families. Having insurance coverage within superannuation provides a safety net and financial protection against unforeseen events such as death, disability, or terminal illness. It ensures that individuals and their loved ones are financially supported during challenging times, minimising the impact on their retirement savings or burdening them with excessive debt.


While superannuation funds often provide default insurance cover, individuals can usually tailor their insurance options to meet their specific needs. Depending on the fund, members may have the flexibility to adjust the level of coverage, add additional types of insurance (e.g., income protection), or opt-out of insurance altogether if they have alternative coverage arrangements in place. This level of customisation allows individuals to align their insurance protection with their unique circumstances.

Insurance coverage within superannuation offers numerous benefits to individuals preparing for retirement. It provides affordable protection against unforeseen events, ease of application, and accessibility to comprehensive coverage. With automatic coverage and the ability to customise insurance options, superannuation allows individuals and their families to navigate life’s uncertainties with greater peace of mind. By considering the advantages of insurance within superannuation, Australians can make informed decisions and maximise the financial security provided by their retirement savings.

Scroll to Top