The advantages of getting insurance through your super

1 December 2021

The most popular way to get personal insurance in Australia is through a super fund. Almost 10 million Australians are currently insured through their super¹.

Super funds can provide you with an affordable, easy and convenient way to protect you and your family against the unexpected.

Common types of insurance offered by super funds are death cover, total and permanent disability (TPD) cover, and income protection.

Lower cost, more convenience

Insurance can typically be arranged in three ways – directly with an insurer, with the help of a broker or financial adviser, or through a super fund.

Here are some of the advantages of getting insurance through your super:

• Lower cost – generally, premiums tend to be cheaper through super because of the bulk discounts that the super funds get on behalf of their members.
• Convenient payments – premiums are automatically deducted from your super balance, which can be more convenient than paying from your bank account.
• Fewer medical checks – most super funds can provide default cover without you needing to apply or provide evidence of good health. This can be useful for people who work in high-risk jobs who could face difficulty getting insurance outside super.
• Tax-effective – paying for insurance from your super tends to be more tax-effective than paying from outside of super. This is because employer contributions into super are taxed at 15%, which is lower than most people’s marginal tax rate for their income.
• More claims tend to be accepted – research by the Australian Prudential Regulation Authority (APRA) in 2021 found that insurance through super often results in more claims being accepted, fewer disputes and faster processing times compared with insurance outside of super².

Consider what’s best for you

Super funds generally provide a basic level of cover, which will not be specific to your personal circumstances.

It’s important to consider if insurance through super gives you the right level of cover for your situation. You should consider what type of cover is best for your age, gender, occupational risk and whether you have children and dependents. Most super funds allow you to apply for additional cover, subject to conditions.

Your super fund’s Product Disclosure Statement (PDS) will include details of its insurance cover. Talk to your super fund about the different levels of cover available to you.

It is also important to remember that if you change super funds or stop contributing to super, your cover may end. Insurance premiums are also deducted from your super balance which reduces your savings in retirement.

Insurance through LGIAsuper

LGIAsuper offers affordable and flexible insurance for a wide range of financial and lifestyle needs.

Most LGIAsuper members automatically receive insurance cover as part of their membership, if they are aged over 25 years and have more than $6,000 in their super account.

Our insurance cover can:

• help you meet the cost of living if you are temporarily unable to work due to injury or illness
• provide you with a lump sum if you are totally and permanently disabled
• give your family financial security in the event of your death.

During the 2020/21 financial year, LGIAsuper processed over 400 insurance claims totalling more than $42 million in benefits to help our members and their families.

Information about the types of insurance cover and benefits that we can provide our members is available in the LGIAsuper Insurance guide, which is available for your account at PDS and guides

You can also use our insurance calculators to find out what level of cover might be best for you and how much this will cost.

Useful resources

• Insurance through super on the Moneysmart website (Australian Government)
• Life insurance claims comparison tool – available on the Moneysmart website, published by the Australian Securities and Investments Commission (ASIC)
• LGIAsuper Insurance guide - available for your account at PDS and guides
• Let’s Learn: Insurance through super from LGIAsuper

We’re here to help

If you have any questions about insurance cover through your super, please contact us on 1800 444 396.