Here’s the latest in a series of articles from industry super fund, First Super, with tips to help you make the most of your super. This time the focus is on better understanding insurance inside super and ensuring you have the right level of cover for your circumstances.

Step 4 – Check Your Insurance in Super

You may not be aware, but you likely received a ‘default’ level of insurance for death and total and permanent disablement (TPD) when you joined your super fund. This provision was introduced as part of the Federal Government’s “Stronger Super” reforms in October 2013.

Six years later on, new laws coming in on 1 July 2019 mean that super members whose accounts have not received a contribution or a rollover (i.e. have been inactive) for more than 16 months could lose their insurance in super.

Your super fund will have written to you about the upcoming changes to default insurance inside super if you have an inactive super account.

If these communications have left you feeling confused, First Super is here to help.

Am I effected by the changes?

You will affected by the new Protecting Your Super Package (PYSP) laws if your account has been inactive for 16 months or more on 30 June 2019. You are at risk of having your insurance in super automatically switched off unless you:

– you formally elect to keep your insurance; or

– your fund receives a contribution or rollover into your inactive super account.

After 1 July 2019, super funds will need to tell their members whose accounts have been inactive for 9, 12 and 15 months that their insurance inside super is at risk of being cancelled unless they take one of the actions mentioned above.

If you’re a First Super member and you fall into one of the above categories, you can discuss any queries with our Member Services Team on 1300 360 988.

What do I need to consider?

The PYSP laws give you a good opportunity to review the insurance you have inside super.

You probably insure your home, your car, your possessions and your health. It might not be nice to think about, but what would happen if you lost your ability to earn an income? Or how would your dependants manage financially if you died?

Factors to think about

What cover do you have now?
Do you know if you have enough insurance cover to support you or your dependants if the worst were to happen? Did you know that First Super also offers Income Protection – cover for if you were sick or injured and unable to work for a period of time? You can check your level of insurance inside your super account on your annual member statement or by contacting the Member Services Team.

What about insurance in other super funds?
If you have more than one super account, you may be paying for multiple insurance policies. It may be better for you to combine your super into one account, paying only one set of fees, and having just one insurance benefit. On the other hand, one policy might offer more valuable benefits than another and it could be in your interests to keep the extra super account to keep that extra cover.We recommend seeking financial advice to find out what would be best for your personal circumstances.

How much cover do you need?
Information about how to work out how much cover you need are on the Insurance section of First Super’s website. Our calculator can also help you get an estimate based on your actual figures.

What are the benefits of insurance inside super?

Premiums are deducted from your super balance.
This means there is no impact on your take-home pay and it’s a tax-effective way of paying (super is taxed at 15%, whereas marginal tax rates are often higher).

It’s cheaper
Life insurance held within super is usually less expensive than seeking it out as an individual. As super funds buy one policy to cover a large group of people, members pay less for cover than if they were buying the policy themselves.

This bargaining power enables First Super to negotiate competitive fees for members with our insurance partner, MetLife. There are no financial incentives to us for doing this and we pass the full discount to you, the member.

Where can I get more help?

If you’re unsure where to start with insurance, as a First Super member you can access complimentary advice available through our Financial Planners to work out what is best for you. To book an appointment, simply call our Member Services Team on 1300 360 988 or fill in this online form.

First Super also has a team of Business Development Managers and Workplace Coordinators based around the country. They can visit you at your workplace to help to explain your options in super and help with completing forms, as well as providing general advice and running information sessions. Contact our Member Services Team to book a call back.


This article was issued by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988), as Trustee of First Super (ABN 56 286 625 181). It may contain general advice that has been prepared without taking into account your objectives, financial situation or needs. You should consult the Product Disclosure Statement (PDS) before making any investment decision. Content was accurate at the date of issue, but may subsequently change. Please contact First Super’s Member Services Team on 1300 360 988 for updated information or to obtain a copy of the PDS.