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Take Care With Automatic Insurance In Your Superannuation Fund

Many doctors, dentists, other professionals and employees are members of a public superannuation fund (other than a self-managed superannuation fund). And most such funds offer life, total and permanent disability (TPD) and income protection insurance for their members. This is sometimes referred to as “group” insurance in superannuation funds.

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Written by

BERIVAN DUBIER
Last Updated Aug 9, 2024
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Take Care With Automatic Insurance In Your Superannuation Fund

One issue that could arise, is that most super funds will automatically provide you with life cover and TPD insurance with a specific amount of cover, without you asking for it. This is referred to as a “default” amount and is what you will be given unless you ask for something different. Some will also automatically provide income protection insurance. This insurance is for a specified amount and is generally available without medical checks.

Automatic life insurance in super funds is often not personalised and may not meet the personal needs of the member. The cover also has limitations compared to other options. The amount of cover could be too little or too much or not the right type for you. In a survey (MLC. May 2022. Designing group insurance for the future ) of 1500 everyday Australian superannuation fund members, it was reported that :

  • Only 42% of members have ever reviewed their cover
  • Approx 71% of members want cover more personalised

You should consider using a life insurance adviser to review what cover you may have in any public superannuation fund and consider your individual needs, goals and circumstances to advise if this cover should be retained, supplemented, increased or replaced.

If you want to engage Experien Insurance Services for a complimentary review of your existing insurance then you can reach out via email to Lloyd Levin at ‘’ or on 0425 791 656. Lloyd works from our office and helps many of our existing clients.

PLEASE NOTE

This is general information and you should not act on it, or rely on it, without obtaining personal advice. Always read the product disclosure statement (PDS) issued by an insurer before considering to take out insurance. Life insurance and Financial Advice services are provided by Experien Insurance Services Pty Ltd (EIS) ABN 99 128 678 937 and Experien Financial Services Pty Ltd (EFS) ABN 32 631 346 757. EIS and EFS are a Corporate Authorised Representative (No. 320626 and No. 1274354) Count Financial Limited ABN 19 001 974 625, AFSL 227232. Experien and Curve are not related business entities.

Helpful tip:

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Review your superannuation insurance regularly to ensure the level of cover still meets your personal and financial needs. Check the premiums being deducted from your super balance and understand what events are covered. If your circumstances change, reassess your insurance to avoid being underinsured or paying for unnecessary cover.

BERIVAN DUBIER

DIRECTOR

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SEAN DWYER

DIRECTOR
CPA and financial adviser for over 25 years. Loves to help businesses grow. Dad, jogger, cyclist, windsurfer and bad skier.

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FAQ

What insurance might be included in my super fund?

Many super funds offer life (death) and total and permanent disability (TPD) cover, and some also offer income protection. Eligible members may receive a set amount of cover automatically. The types, amounts, costs and eligibility rules depend on the fund and its insurance policy.

Does automatic insurance start for every super member?

No. It generally does not start automatically for a new member under 25 or with a balance below $6,000. You can ask your fund about opting in. A limited exception may apply for some dangerous occupations. Check with your fund rather than assuming you are insured.

How can I find out what cover I actually have?
Log in to your super account, read your annual statement or call the fund. Check the insured amount, premiums, start and end dates, waiting or benefit periods, and any exclusions. Read the fund’s product disclosure statement (PDS) and insurance guide for the terms that apply to a claim.
Is the default amount of cover likely to be enough?
It may be too much, too little or unsuitable for your circumstances. Consider your debts, dependants, income, existing policies and what expenses your household would face if you died or could no longer work. A licensed insurance adviser can assess your needs and the terms of any existing cover.
What does insurance through super cost?

Premiums are generally deducted from your super balance. This avoids a separate payment from your bank account, but reduces the amount invested for retirement. Premiums and cover can change with age or other policy terms, so review both the cost and the benefit regularly.

Can my insurance stop if I change jobs or stop contributing?

Yes. Funds generally cancel insurance on accounts that have received no contributions for at least 16 months, unless you take action to keep it. Other fund rules can also affect cover. If your employment or contributions change, contact the fund promptly and check its notices and deadlines.

What should I do before consolidating super funds or cancelling cover?

Check the insurance in every account first. Moving or closing an account can end its cover, and replacement insurance may cost more, have exclusions or be unavailable because of your age or health. Confirm any new cover is in force and meets your needs before cancelling an existing policy.

Do I need a medical examination for automatic cover?
Default cover is often available without medical checks, but that does not mean every claim will be covered. Eligibility rules, exclusions and definitions still apply. Increasing cover or applying for a different policy may require health and other information. Read the PDS and seek personal advice before making changes.

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