Life Insurance in Superannuation - Is It Enough Cover?

Life Insurance in Superannuation - Is It Enough Cover?

Us Aussies are very lucky to have an established superannuation government legislation, where employers contribute to your retirement fund and providing peace of mind for the future. But a lot of Aussies don’t know that their superannuation can also provide some coverage and will quite often have a life insurance and TPD insurance component included in it. Well you do!  Premiums are automatically deducted from your super balance, reducing your future retirement funds so you want to make sure you have the right life insurance for your needs. 

Of course, the next questions are always ‘Do I have enough life insurance in my super?’ and ‘What is the best life insurance cover for my needs?”  Billy Explores has done some digging and we’ve got the answers to the most important questions! Read on to find out then find out why you should compare life insurance through Billy Explores, even if you already have life insurance in your super!

Not Many Aussies Know They Have Life Insurance Included In Super

Speaking on ABC Melbourne Drive radio recently, Jane Eccleston, ASIC’s Senior Executive Leader of Superannuation, said many Australians are not even aware they hold insurance through their super fund.

‘Many Australians have insurance through their superannuation – almost 10 million superannuation accounts have insurance’, Eccleston says.

‘While there are benefits in having insurance in your super, it’s worth remembering that you ARE paying for it from your super account and it’s reducing your super balance. And if you have multiple super funds, you’re likely paying multiple insurance premiums.

‘It all comes down to your personal circumstances and preferences. We encourage listeners to check if they’ve got insurance with their super fund and what they’re covered for.

Types of Life Insurance in Super

Most super funds automatically provide as part of your super:

  • life cover (or what is commonly called death cover) (which pays a lump sum if you die) and
  • total and permanent disability (TPD) insurance— which pays a lump sum if you become totally and permanently disabled because of illness or injury. 

Some super funds will also automatically provide income protection insurance – which pays some of your income if you can’t work for an extended period of time due to illness or injury.

If you want to find out some more information about specific types of life insurance please click here for life insurance information and here for TPD insurance information.

Will The Life Insurance In My Super Give Me Enough Coverage?

Most super funds offer default insurance, which means it is not tailored to any member’s particular circumstances. This means your individual requirements are not taken into account, such as family and other financial obligations.

‘It’s worth taking the time to understand what cover you may need in light of your personal situation and responsibilities, for example, whether you have dependents or a mortgage or other debts. ASIC’s Moneysmart’s life insurance needs calculator can help work out if you need life cover and how much you might need’, Eccleston says.

A great way of making sure you do have enough coverage in your super life insurance policy is of course to compare life insurance providers through Billy Explores! Our panel of providers take into account all of your personal situations and get the best value life insurance policy for your needs.

See if you can save today!

Join thousands of others who have switched and saved with Billy Explores

Can I Buy Life Insurance Separate To My Super?

Your superannuation and life insurance decisions are completely up to you. Of course you’re able to opt out of insurance cover and buy life insurance coverage or change your cover to suit your needs, although you may need to go through medical checks if increasing your life insurance coverage.

As we always say, the best thing to do is to compare life insurance provider through Billy Explores, and our panel of providers will be able to give you a good indication whether your super life insurance is the best value policy for your specific needs. You can always have multiple life insurance policies if you feel you need the additional peace of mind.

What Are The Pros and Cons of Life Insurance In Super?


  • Premiums are often cheaper than outside of super
  • You are automatically covered so you don’t have to think about it and premiums are deducted from your super balance.
  • There are usually no health checks under a default level of cover
  • It can be tax effective if your marginal tax rate is greater than 15%.


  • The amount of cover you can get in super is often lower than the cover you can get outside super.
  • If you change super funds, your contributions stop or your super account becomes inactive your cover may end (unless you tell your fund you want to keep it).
  • Insurance premiums are deducted from your super balance. This reduces your savings for retirement.

As always, you need to determine whether life insurance is a luxury or a necessity in your individual situation. If it isn’t meeting your needs, then compare through Billy Explores and make.

Will Life Insurance In My Super Always Be Included Automatically?

No, you will not always have life insurance included in your super. There has been some changes recently to laws, which have changed whether life insurance is automatically included in your super or not.

  • Life insurance is no longer automatically provided to new super fund members aged under 25 unless the member works in a dangerous job.
  • Similarly, insurance is no longer automatically provided to new super fund members with balances under $6,000.

Need A Different Life Insurance Policy? Compare life Insurance Providers Through Billy Explores

So, you’ve reviewed your life insurance policy that’s included in your super, and decided that you need some more coverage, or it’s not the best life insurance for your needs. The best part is you can compare life insurance providers in Australia from our panel of providers and get the best life insurance policy quotes and coverage for your specific needs. Save time and effort, and explore potential savings too. Compare life insurance policies today through Billy Explores!

See if you can save today!

Join thousands of others who have switched and saved with Billy Explores


  • How Do I Check If I Have Life Insurance Included in My Super?

    The best way is to contact your super fund, or check out your latest superannuation report from your fund. This should have the details of any life insurance coverage and life insurance premium deducted from your super balance included in there.

  • Do I Have To Keep My Life Insurance In My Super?

    No, you don’t have to keep the life insurance policy that’s included in your super. If you feel it doesn’t meet your needs you can opt-out of the policy, then compare life insurance providers through Billy Explores and our panel of providers to get the best value life insurance cover for your needs.