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How does insurance in superannuation work?


How does insurance in superannuation work?

If you are a member of a super fund, there is a very good chance that your fund has taken out a policy of insurance which covers you and the other members of the fund for Total and Permanent Disability (TPD) and death insurance benefits (often called life insurance). The policy may also provide benefits for Income Protection or Salary Continuance.

The insurance benefits are provided by a policy of group insurance. In most cases, tens of thousands of individual super fund members are covered by the same policy of group insurance.

When can I access the insurance in my super?

In the event that you die or get sick or injured and cease work, you can make a claim on the group policy of insurance. If you satisfy the relevant policy terms (which are different for each super fund), the benefit will be paid into your super account.

Importantly, you are not the owner of the relevant policy but you are a beneficiary of the policy which is why any insurance benefits get paid into your superannuation account.

If you successfully claim and the TPD insurance benefit is paid into your super account, you can either leave it in the account or make an application to withdraw the money early on various grounds of early release (usually because you have been assessed as having a permanent incapacity).

Similarly, if you die any death insurance benefit will be paid into your super account and then paid out to your dependents.

Visit this article to find out “What to do if your superannuation TPD claim is rejected”.

Do I pay for the insurance?


If you are covered by the relevant policy, your super fund will deduct some money from your superannuation account each month (or quarter) to pay your premiums.

Insurance provided through super sometimes stops certain super fund members from getting insurance cover under the policy. The policy usually does this by saying that you do not get cover if you are not “At Work”.

Under most insurance policies in super, you need to be “At Work” at the time your insurance cover begins. “At Work” means different things under different policies. It usually means that a member is working without restriction due to illness or injury.

If you weren’t “At Work” when you joined the fund, you may not be covered under the policy. We can help you, for free, to find out your specific entitlements under the policy of your super fund.

Can I be covered under more than one group insurance policy if I have more than one super fund?


TPD insurance is not like some other insurance and you can usually claim on more than one policy. Unlike other policies of insurance like home and contents insurance where this would be considered “double-dipping”, under TPD insurance policies you can claim multiple benefits.

Recent legislative changes have meant that you are less likely to have more than one superannuation account. However, if you do have more than one account and you cease work due to illnesses or injury or die, claims can be made on all of the insurance policies which you had at the relevant time.

Who is my TPD insurer?

It is the super fund’s responsibility to provide you with a cost-effective and appropriate insurance policy which provides benefits which are suitable for its members.

All super funds enter into arrangements with a number of different insurers. Some of the insurance companies which provide group insurance policies include Hannover Life Re, AMP, MetLife, AIA, CommInsure, MLC, OnePath, TAL and many others.

Usually, a super fund will update its insurance arrangements roughly every three years.

How do I know if I can claim on the TPD or Income Protection insurance policy which covers me?

All insurance policies provide different definitions of TPD.

Similarly, every group insurance policy provides different benefits for its members.

If you have ceased work due to illness or injury, it’s worth considering and investigating making a claim on any insurance which is held in your superannuation fund. You may have TPD or salary continuance cover in your superannuation fund without even knowing.

Therefore, if you have ceased work due to illness or injury, we recommend getting in touch so we can check what cover you have for free.

You may also find the following helpful

How we charge

We are Australia's best value superannuation/insurance law firm. Other law firms charge nearly double (& sometimes more than double) what we charge. So, if you get a quote from them, or have a cost agreement, ask us what we will charge you.


Contact Berrill & Watson for FREE advice & help with your superannuation insurance query.

VIC – 03 9488 8048

QLD – 07 3166 9034

Anywhere else in Australia – 03 9488 8048

Email:  [email protected]

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