Common Misconceptions About Superannuation Insurance: What You Need to Know

Most Australians understand that superannuation helps fund retirement. But what many people don’t realise is that super funds often include default insurance—covering you for things like Total and Permanent Disability (TPD), Income Protection, and Life Insurance.

If you’ve had to stop work due to illness or injury, you could be eligible for a super insurance claim—even if your condition isn’t work-related, or your account is now closed. Unfortunately, confusion about how super insurance works means many people miss out on thousands in entitlements.

At Better Claim, we help Australians navigate the claims process every day. Let’s clear up some common misunderstandings about insurance in super.

Does claiming insurance through super reduce my retirement savings?

No. When you claim TPD or other insurance through your super, it’s not coming out of your retirement savings. Instead, it’s a separate insurance policy attached to your super fund. Successful claims are paid into your super account, and from there, you can generally access the funds—though tax and Centrelink rules may apply.

Can I claim super insurance if I already receive workers' compensation?

Often yes. In most cases, you can claim both workers’ compensation and TPD insurance through super. They operate independently, but one may affect the other, so it’s important to get tailored advice. For example, receiving a lump sum TPD payout may temporarily reduce your workers' comp payments in some states.

Can I claim TPD if I had a pre-existing medical condition?

You might still be eligible. Many people wrongly assume pre-existing conditions automatically rule them out. If you were working without restrictions when you became unwell or injured, and had active insurance cover at the time, you could still make a successful TPD claim. Every case is different—expert guidance is key.

Is a work-related injury or illness required for a TPD claim?

No. Unlike workers’ compensation, TPD and Income Protection insurance cover you regardless of how the illness or injury occurred. Whether it’s a chronic condition, mental illness, or injury unrelated to work, what matters is that the condition stops you from working.

Can I claim super insurance if my account is now closed?

In many cases, yes. If you had active insurance cover when you stopped working, you may still be able to claim—even if your super account has since been closed or your insurance has lapsed. This is one of the most common scenarios we help clients with at Better Claim.

Is it too late to claim TPD if I stopped working years ago?

Usually not. There are no strict time limits in many cases. As long as your condition is considered permanent and you had insurance when you stopped working, a TPD or super insurance claim might still be possible—even if it’s been several years. Always seek a second opinion if you’ve been told you’re ineligible.

Can I claim from multiple super funds?

Yes, sometimes. If you had insurance cover through more than one super fund when you stopped working, you may be able to claim multiple TPD lump sum payouts. However, with Income Protection policies, payments are typically capped at a percentage of your income, so careful planning is essential.

Need help with a TPD or super insurance claim?

Super insurance can be difficult to navigate—but you don’t have to figure it out alone.

At Better Claim, we specialise in helping Australians understand their super insurance entitlements and get the payouts they deserve. Whether you’re unsure if you’re eligible, confused by the paperwork, or have already been knocked back—we’re here to help.

Book your free 30-minute consultation today and find out if you can make a claim through your super.