The 3 Types of Insurance Inside Your Super Fund Explained
- a few seconds ago
- 10 min read
If you've recently been diagnosed with a serious illness or injury, or if you've had to stop working and are trying to figure out how to get through, you may be sitting on a financial safety net you didn't know existed.
Most Australians are enrolled in a superannuation fund from their very first job. And most of those funds quietly include three types of insurance cover: life insurance, Total and Permanent Disability (TPD) insurance, and income protection insurance. These benefits are built into your super by default, but most people have never been told they're there, let alone how to access them.
Over $1 billion in super insurance benefits goes unclaimed in Australia every year. Not because people aren't eligible. Because they don't know to look.
This article explains exactly what the three types of insurance in super are, what each one covers, who qualifies, and what to do if you think you may be able to claim.
What Is Super Insurance and How Does It Work?
When you contribute to your superannuation fund, or when your employer contributes on your behalf, a portion of your account balance is typically used to pay premiums for insurance cover. This happens automatically in most industry and retail funds, often without you needing to actively apply.
This means that right now, even if you've never thought about it, your super fund may be paying for insurance on your behalf. The cover sits inside the fund, and if you become ill, injured, or die, a claim can be lodged directly with the fund, not with Centrelink, and not with a separate insurer.
The three types of insurance most commonly included are described in your fund's Product Disclosure Statement (PDS): a document you can download from your fund's website or request directly.
Important: The amount of cover and the exact conditions attached vary significantly between funds. Checking your own PDS, or getting a free eligibility check from Better Claim, is the only way to know exactly what protection you have.
The 3 Types of Insurance in Your Super
1. Life Insurance (Death Cover)
Life insurance, also called death cover, pays a lump sum to your nominated beneficiaries if you die. It's the most commonly understood type of cover, and it's included as standard in the vast majority of Australian super funds.
What most people don't know is that life insurance through super can also be accessed before death, if you are diagnosed with a terminal illness. If a medical professional certifies that you are likely to die within 24 months, you may be entitled to an early release of your life insurance benefit — providing critical financial support at the most difficult time.
The payout amount depends on your fund and the level of cover you hold. Cover often reduces as you get older and typically ends around age 70. If you've switched funds over the years, you may hold cover across more than one account.
2. Total and Permanent Disability (TPD) Insurance
Total and Permanent Disability insurance, or TPD insurance, pays a lump sum if you become unable to ever work again due to illness or injury. It is separate from the government disability support pension and is administered entirely through your super fund.
The average TPD payout in Australia is $440,000, though actual amounts vary depending on your fund and the level of cover you hold.
There are two main types of TPD definitions you'll see in your policy:
Any occupation TPD: You must be unable to work in any job for which you are reasonably suited by education, training, or experience.
Own occupation TPD: You must be unable to return to your specific occupation, a broader and generally more accessible definition.
Many Australians are assessed under the "any occupation" standard even when their policy may include more favourable terms. This is one of the key areas where getting professional help makes a significant difference to claim outcomes.
TPD cover typically ends at age 65–70, depending on your fund. It is available regardless of how long ago your diagnosis or injury occurred, you can claim retroactively if you were covered at the time.
Learn more about TPD claims and how the process works.
💡 Over $1 billion in super insurance benefits goes unclaimed in Australia every year. Most people don't know they can claim.
3. Income Protection Insurance
Income protection insurance, sometimes called salary continuance, pays you a monthly benefit if you are unable to work due to illness or injury. It is designed to replace a portion of your income while you recover.
Most funds offer income protection payments of 75–85% of your pre-disability income. The cover is subject to:
A waiting period: typically 30, 60, or 90 days before payments begin
A benefit period: the maximum time payments will continue (often 2 years, but some policies extend to age 65)
Income protection is not just for people who are permanently disabled. It is designed for people who are off work, now, dealing with surgery, cancer treatment, a serious mental health episode, or any other condition that prevents them from working.
Important factual note: Income protection and TPD insurance are not mutually exclusive. If your condition may be permanent, you may be able to lodge both claims at the same time. Income protection pays you while your TPD claim is being assessed (which typically takes 3–12 months). If TPD is approved, offset provisions apply and income protection payments cease, but you receive the lump sum.
Learn more about income protection claims to understand what your cover may include.
Do You Qualify?
Eligibility for each type of cover varies, but here are the general principles:
You were a member of a super fund that included insurance at the time your illness or injury occurred
You meet your fund's definition of the relevant claim type (TPD, income protection, or terminal illness)
You can provide a certified copy of government-issued photo ID (passport or driver's licence), which is mandatory for all super insurance claims
Your policy was active, premiums were being deducted, when the event happened
You are within any applicable claim lodgement timeframe (which varies by fund)
Many people assume they won't qualify because:
They've since left that employer or switched funds
Their condition isn't "obvious" or visible
They already tried and were told no
Their super balance is small
None of these automatically disqualify you. If you're unsure whether you qualify, Better Claim offers a free eligibility check — no commitment required.
What Your Super Fund Won't Tell You
Your Australian super fund is not required to contact you when you may be eligible to make a claim. The obligation to lodge a claim rests entirely with you, and most funds rely on the fact that most members don't know to look.
Here are some things funds typically don't proactively share:
That you have insurance at all. Many people have been contributing to super for years without ever knowing their fund includes TPD, life, or income protection cover. Our guide on how to check if your super includes insurance explains exactly how to find out.
That your cover may have lapsed without notice. If you stopped contributing for a period, during parental leave, between jobs, or while receiving Centrelink payments, your cover may have become inactive. Some funds reinstate cover automatically; others don't.
That you can claim retroactively. If you were covered at the time of your diagnosis, you may be able to claim even now, years later.
That a denial is not final. If your claim is denied, you have rights, including lodging an internal dispute with the fund and escalating to AFCA (the Australian Financial Complaints Authority) if needed.
50% of Australians don't know their super includes insurance cover. If you're reading this and didn't know, you're in the majority, not the minority.
How to Check What Cover You Have
You shouldn't have to go digging for this information, but here's how to find it:
Log into your super fund's online portal. Under "insurance" or "my cover," you should see your active policies and current cover amounts.
Download and read your PDS (Product Disclosure Statement). This is the key document that explains the conditions, waiting periods, exclusions, and definitions for your cover. It's available on your fund's website.
Call or email your fund. Ask them directly: "What types of insurance cover do I currently hold, and what are the amounts?" They are required to tell you.
Use the ATO super lookup tool. If you've lost track of old super accounts, the ATO's online tool (at ato.gov.au) can help you find them. This is especially useful if you've changed jobs and may have super spread across multiple funds.
Contact Better Claim for a free check. Our team can review your super history, identify which funds held insurance at the relevant time, and assess your eligibility — at no cost to you.
A Note About ATO-Held Super and Insurance Cover
If some of your super was transferred to the ATO as unclaimed super, which can happen when a fund account is inactive for an extended period, it's important to understand this: the insurance cover does not transfer to the ATO.
When super is handed over to the ATO as unclaimed, insurance cover is removed before the transfer. The ATO holds the cash balance only.
This does not necessarily mean your claim is lost. The ATO's super lookup tool can tell you which original fund your super came from. If that original fund held active insurance at the time of your diagnosis or injury, you may still be able to lodge a claim directly with that original fund.
Better Claim specialises in exactly this type of tracing — finding the right fund, at the right time, to make the strongest possible claim on your behalf.
When Does Super Insurance Cover Start and Stop?
When it starts: Cover typically begins when you join the fund and your account becomes active (i.e., contributions are being received).
When it may pause: If your account becomes inactive, no contributions for 16 months, your fund is required by Australian law to cancel your cover unless you have specifically opted in to continue it.
When it ends: TPD cover generally ends at age 65–70. Life insurance cover often ends at 70. Income protection cover end dates vary — check your PDS.
When you switch funds: Cover does not automatically transfer when you move to a new fund. You start fresh with the new fund's default cover.
If you had cover at the time your illness or injury occurred, even if that fund is no longer active, you may still be able to claim. This is one of the most common situations Better Claim helps clients navigate.
Common Reasons Super Insurance Claims Are Delayed or Denied
Understanding the types of insurance in your super is one thing. Getting the claim approved is another. Here are the most common reasons claims run into difficulty:
Incomplete documentation — Missing medical evidence, unsigned forms, or a missing certified copy of government-issued photo ID (passport or driver's licence) are the most frequent causes of delays. Submit everything together from the start.
Pre-existing condition exclusions — Insurers sometimes apply exclusions that don't correctly reflect the policy terms. Many of these decisions are overturned on review.
Incorrect TPD definition applied — Your fund may assess your claim against a stricter definition than the one in your policy. Understanding how TPD claims work can help you identify when this has happened. This is one of the most common reasons valid TPD claims are rejected.
Cover had lapsed without notice — If your account became inactive and your insurance was cancelled, the fund's notification obligations should be examined before accepting the cancellation as final.
Delayed response from the fund — If your fund takes an unreasonable amount of time to assess your claim, you may have grounds for an AFCA complaint.
A denied claim is not the end. Better Claim specialises in reviewing and appealing denied super insurance claims.
How Better Claim Can Help
Better Claim was founded by Victoria and Sophie, two women who saw first-hand how many Australians were missing out on benefits they were owed, simply because the process was confusing, exhausting, and stacked against the individual.
Better Claim handles TPD claims, income protection claims, terminal illness claims, and denied claim appeals — all on a no-win, no-fee basis. You pay nothing unless your claim succeeds. Our fee comes from your settlement, not your pocket.
Here's what we do for you:
Free eligibility check: we review your super history and current cover at no cost
Claim assessment and lodgement: we prepare and submit your claim, handling all documentation
Communication with the fund: you don't have to chase, follow up, or navigate fund bureaucracy
Appeals and AFCA escalation: if your claim is delayed or denied, we escalate on your behalf
You've already been through enough. Let us handle the paperwork.
Frequently Asked Questions
How do I know if my super fund includes all three types of insurance?
Log into your online portal and look for an "insurance" tab, or download your fund's PDS. Better Claim can also check this for you for free — contact Better Claim and we'll review your cover with no obligation.
I've switched super funds a few times. Can I still claim on an old fund?
Yes, your entitlements are tied to the fund that was active at the time of your illness or injury. Switching funds does not cancel retrospective claims. Better Claim specialises in tracing historic fund coverage to locate the right policy.
Can I claim income protection and TPD at the same time?
Yes. These are not mutually exclusive. If your condition may be permanent, you may be entitled to lodge both claims simultaneously. Income protection pays while the TPD claim is assessed. If TPD is approved, offset provisions apply. Better Claim will advise you on which claims to lodge.
What if I wasn't working when I was diagnosed?
You may still be eligible. Cover is typically based on when you last held an active account with the fund, not on whether you were employed at the time. This depends on your specific policy and timing.
How long do super insurance claims take?
⏱ REALISTIC TIMEFRAMES
Simple claims: 3–6 months
Complex or disputed claims: 6–12 months
AFCA appeals: Add 6–12 months
Better Claim manages the entire process so you don't have to chase your fund.
What does Better Claim charge?
Nothing upfront. Better Claim works on a no-win, no-fee basis, our fee is deducted from your settlement only if your claim is successful. The initial eligibility check is completely free.
What if my claim gets denied?
A denial is not the end. You have the right to an internal review with your fund, and if that doesn't resolve it, to escalate to AFCA (the Australian Financial Complaints Authority) at afca.org.au. Better Claim handles appeals and AFCA complaints regularly.
Conclusion
The three types of insurance in your super — life insurance, TPD insurance, and income protection insurance — are benefits most Australians have never thought about. If you've been diagnosed with a serious illness or injury, or if you've been unable to work, these benefits may be available to you right now.
The process of identifying, lodging, and following up on a claim can be complex, especially when you're already dealing with illness or financial stress. That's where Better Claim comes in. We handle everything, on a no-win, no-fee basis, so you can focus on your health.
You've already been through enough. Let us handle the paperwork.
Resources
AFCA, afca.org.au, Dispute resolution for super insurance claims
ASIC MoneySmart, moneysmart.gov.au, Super and insurance explainers
ATO, ato.gov.au/super, Super fund lookup and unclaimed super
SuperConsumers Australia, superconsumers.com.au, Independent super research
This article is intended as general information only and does not constitute legal, financial, or insurance advice. Super insurance entitlements vary between funds and individual circumstances. Better Claim recommends seeking professional advice specific to your situation. For complaints or disputes, contact AFCA at afca.org.au.
