Understanding Insurance in Superannuation

You Might Be Covered Without Even Knowing

Most people think of superannuation as something for retirement—but there's more to it. Tucked away inside many super accounts is default insurance cover that could support you if illness or injury forces you out of work.

If you've never applied for insurance but have a super account, there's a good chance you already have some cover. But how it works—and how to claim it—can be anything but simple.

What Is Default Insurance?

Default insurance is cover that’s automatically included in many superannuation accounts. No application. No medicals. It just kicks in once you meet a few criteria.

There are typically three types:

• TPD (Total and Permanent Disability) – A lump sum if you can’t work again due to illness or injury.

• Life Insurance (Death Cover) – A payout if you pass away, or if you're diagnosed with a terminal illness.

• Income Protection – Ongoing payments if you’re temporarily unable to work (not always included—you often need to opt in).

  
  

The key point? Many people don’t realise they have this cover until it’s too late.

Why It Matters

Default insurance provides peace of mind. It’s:

✔️ Easy to access

✔️ Often more affordable than standalone cover

✔️ Paid from your super, so no out-of-pocket cost

✔️ There when you need it most, if your health takes a hit

But it’s not without its downsides. The cover can stop without notice, come with exclusions, or change over time. That’s where things can get complicated.

The Complexities That Catch People Out

When it comes to claiming, the fine print matters. Here are six common issues we see at Better Claim:

1. When Does Cover Actually Start?

Thanks to government changes (PYS legislation), insurance might only begin if your super balance hits $6,000 and you're over 25. Some funds also require an employer contribution to activate the cover.

2. Are You “At Work” Enough?

To qualify, many policies require you to be working or capable of working, when your cover starts. Definitions vary. Some say you just need to show up one day. Others want you to work 30 days straight without restrictions.

Why it matters: If you were unwell or restricted when cover kicked in, you might be classed as having “limited cover” or none at all.

3. Pre-Existing Condition Exclusions

Some policies exclude conditions you had before the cover started. The rules around this vary wildly between funds. You may also face restrictions if:

• You’ve previously claimed TPD or terminal illness

• You weren’t working for a period before cover began

• Contributions were delayed

4. Other Hidden Exclusions

Some things that may be excluded:

• Pregnancy-related conditions

• High-risk sports or self-harm

• Being unemployed at the time of your claim

5. Your Cover Might Have Ceased

If you haven’t made contributions or rollovers for a while, your cover might have been cancelled, sometimes after just 12 or 18 months. Other reasons it can stop:

• Your super balance drops

• You change jobs or stop work

• You reach the expiry age

Problem is, many people don’t realise until they go to claim.

6. Terms May Have Changed

Insurance policies change all the time. Your fund is meant to notify you, but understanding how those changes affect your claim is another story.

You might be assessed under a mix of old and new rules, depending on when things happened. That can make the claim process longer and more complex.

How to Check Your Insurance

Not sure if you're covered? Here's where to start:

• Log into your super fund’s portal – Most have an insurance section

• Review your latest super statement – It’ll list your cover and premiums

• Call your fund – Ask them to confirm what you’re covered for

• Check your super via myGov – Useful if you’re unsure who your fund is

And if it still feels confusing? That’s what we’re here for.

How We Help

At Better Claim, we take the guesswork out of claiming insurance through your super. We’ll:

✅ Check your eligibility

✅ Identify any red flags early

✅ Handle the paperwork

✅ Guide you through every step

We also provide a tailored Claim Expectation Guide, so you know what to expect before you lodge a claim.

Off Work Due to Illness or Injury?

You might have insurance in your super that can help. Let’s find out.

🎯 Book your free 30-minute consultation

📞 Call us today, our friendly team is here to help

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You’ve paid for this cover—let’s make sure you can use it.