Insurance inside super: does the cover pay, what it costs, and what it can't tell you

Pensions: all tracked plans · Australian super in numbers · Private market performance · the PE statistics · what plans disclose · where they diverge

Most Australian super accounts quietly carry life, disability and income-protection insurance, paid from the member's own balance. In the funds' latest reported year that came to A$6.4bn of premiums across 83 funds — and A$7.5bn came back out as paid claims. This page reads the regulator's fund-by-fund insurance statistics: which funds' cover actually pays, what it costs per member, who the insurers behind the funds are — and, because it is the question people reach for, why insurance data cannot tell you whether a fund is sustainable (and which numbers can).

Claims in, claims paid — by cover type

Three kinds of default cover sit in super. The claims record, sector-wide:

The number worth staring at: disability (TPD) cover paid out A$3.5bn against A$2.5bn collected in the same year — the cover pays, at scale. Claims paid in a year often relate to earlier years' cover, so treat these as cash-flow figures, not a same-policy loss ratio. The declined counts are real people, though: 2,075 TPD claims were declined in the year.

Which funds' cover pays — and where claims get declined

The claims admittance rate is the share of finalised claims accepted. We rank each fund by its weakest cover type — a fund should be judged on the cover most likely to be declined, not its best number. Funds with at least 200 claims received:

Lowest weakest-cover admittance rates

Highest

A low rate is not automatically misconduct — occupational mix and cover definitions differ — but it is exactly the question to put to a fund before relying on its default cover.

What default cover costs per member

Premiums collected per covered account, funds with 100,000+ member accounts — the spread is wide enough to matter to a balance over decades:

Most expensive

Least expensive

Cost differences partly reflect member age and occupation mix and how much cover a fund defaults people into — dearer is not automatically worse. But premiums come straight out of retirement balances, which is why regulation now cancels cover on inactive accounts.

Who actually insures the funds

Funds don't carry the insurance risk themselves — they buy group policies from life insurers. Premiums passed to insurers, as the funds report them (group entities can appear under variant names; figures split evenly where a fund pools several insurers):

Concentration is the story: a handful of insurers stand behind most of the system's default cover. Only 2 funds place cover with an insurer connected to their own group — group self-dealing, common in the bank-owned era, has almost left the system.

Can insurance data tell you a fund is sustainable? No — these numbers can

A tempting read is that a fund with generous, cheap insurance is "healthy". It doesn't follow: super funds are defined contribution — your balance is yours, the insurance risk sits with the insurer, and a fund with weak insurance can be perfectly solid. The sustainability question has better data: net member benefit flows — whether money is arriving faster than it leaves. A fund in persistent net outflow must sell assets to pay departures, spreads fixed costs over a shrinking base, and is the classic merger candidate. The largest net outflows among A$10bn+ funds, the year to 30 June 2025:

Context matters and is shown in the table: closed government defined-benefit schemes run down by design — outflow there is the plan working, not failing. The retail platforms in net outflow are the ones consolidation watchers track. The other side:

Largest net inflows

Fund-by-fund insurance detail is on each fund's page — start from find your fund · the wider spending picture: Australian super in numbers.