Do I have life insurance through Super? Ten million Australians do, though only half are aware of it.

Age and changing circumstances change our attitude towards and understanding of our Superannuation savings for retirement.

When you’re 25, retirement is too far away to think about it.

When you’re 65, you’re only two years from potential Age Pension eligibility: retirement savings matters much more.

Indeed, according to a 2019 YouGov Galaxy Online Omnibus study, one-third (34%) of Australians rarely or never open communications from their Superannuation fund resulting in one in four not knowing their Super balance and by the estimate of the study 44% of Australians being unaware of the insurances included in their Super account.

The interesting dichotomy here is that whilst the 25-year-old isn’t thinking about their Superannuation savings, they should be very interested in the life and TPD (total and permanent disability) insurances likely included under their Superannuation: statistically they’re not.

Let's talk numbers

In 2021 according to Jane Ecceleston, ASIC’s Senior Executive Leader of Superannuation, many Australians are unaware they hold life insurance through Superannuation.

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

According to Life Insurer MetLife, around 50% of Australians know they have life insurance through their Super.

This means, based on Ecceleston’s 2021 estimate, that around 5 million Australians are paying for an insurance product they are unaware of.

And in most circumstances, this means not only life insurance, though TPD and possibly even income protection.

What is even worse is that where people have multiple Super accounts, they’re possibly paying for multiple life insurance policies.

Though there are a few exclusions to the rule according to the Australian Government’s MoneySmart:

• Under the law, super funds will cancel insurance on inactive super accounts that haven’t received contributions for at least 16 months. 
• Additionally, Super funds may have their own rules that cancel insurance where the balance in the account is deemed too low. 
• If you are under 25 years of age except where you work in a dangerous job and your fund chooses to automatically provide cover (something you can cancel if you don’t want it).
• If your Super balance is below $6,000. 
• If you’re over 65, TPD (Total & Permanent Disability) cover usually ends. 
• And if you’re over 70, life cover through Superannuation typically ends. (Outside of Super, as long as you keep paying your premiums, cover will generally continue.)

How to check your insurances through your Super

We have established that most Australians with Super have life insurance (and possibly TPD and income protection) through their Super.

Though it is important to both know for sure and to know how much coverage you have to ensure that is is suitable for your needs.

(According to Rice Warner, default life insurance cover through Super is often insufficient; as a rule of thumb, families in their 30s with children should have life insurance 11x their annual income.)

Checking your insurances through your Super is easy:

1. Call or email your Super fund

Calling or emailing your Super fund should be straightforward.

Once you have been identified, a representative from your Super fund will be able to talk you through your coverage and assist with making any changes.

Some Super funds can even be contacted through channels such as Facebook Messenger, so reaching out could be the fastest and simplest way to understand your insurance coverage situation.

As an example, here are the contact options Australian Super provides its members:

2. Access your Super account online

Accessing your Super account online should be a straightforward process and from there you can check your insurance cover

Many Super funds have dedicated apps which also support this functionality including the ability to submit/request changes to your coverage levels.

3. Check your Super fund’s annual statement

Every year, Super funds are required to provide each member an annual statement detailing all the important information about the state and performance of each member’s account. Such important information typically includes:

• The current account balance.
• What has gone into and left the account over the year including contributions, fees and taxes.
• How the account has performed over the past 12 months and often, longer-term.
• Details of insurance coverage.

Annual statements are typically provided between September and November. Contact your Super fund if you aren’t receiving your annual statement or want to change how you receive it.

How check for multiple Super accounts

We mentioned that where people have multiple, active Super accounts - accounts oftwn forgotten or ‘lost’ - they may well be paying for multiple, duplicate insurances.

Not only does this erode retirement savings, though it is possible that in the event of an insurance claim, claims cannot be made on multiple insurances.

Most Super funds can help you identify if you have multiple Super accounts. The ATO also offers an online service to do the same. 

Conclusion

There is a good chance you have default life (and other) insurance through your Super fund. Affirming that and knowing that your coverage levels are sufficient for your needs is both important and easy.