Many people don’t know that they have insurance attached to their super. Employment super funds offer insurance by default. For other types of funds, you may need to apply for insurance.
Common types of insurance provided through super funds include:
- income protection
- total and permanent disability
- death and terminal illness.
To find out whether you are covered, check your statements or contact your fund. You might have insurance under more than one super fund, which can mean you may have multiple claims. You can also have insurance separately, but the information covered in this fact sheet is only about insurance through your super fund. It is important to note that if you have not made any contributions to your superannuation account for 16 months or more, your insurance will be cancelled. Contact your super fund if you are concerned about this.
Income protection insurance
If you can’t do your usual job because of cancer or other illness, you may be eligible to claim on your income protection insurance. This may be the case if you are assessed as totally disabled or partially disabled and not able to work (or only able to work reduced hours) due to injury or illness. This is sometimes referred to as being temporarily disabled.
The income protection insurance covers part of your salary, usually for a fixed period, and once a waiting period has passed after you make a claim on the
insurance. Usually, the payments you will receive will be offset by other payments you are entitled to during that time such as workers compensation or sick leave payments.
Total and permanent disability (TPD) insurance
To be eligible for payment under TPD insurance, you must show that you have met the insurer’s definition. Usually this means that you can’t ever return to work that fits your education, training or experience. It doesn’t mean you are unfit for any work at all. For example, if you have only ever done manual work and you can no longer do that, it is unlikely to matter if you could possibly do office work.
There is usually a six-month qualifying period. This means you will usually have to wait six months after becoming unable to work before your claim can be assessed.
TPD insurance is usually paid by the insurer as one payment (lump sum) into your super fund. You will also need to satisfy a condition of release, usually permanent incapacity, to access this money.
Death and terminal illness cover
If you have death cover through your super fund, you may be able to access this insurance if you are diagnosed with a terminal illness, even when the insurance is called death cover or life insurance.
You will usually need to provide medical certificates from two doctors that certify you have a terminal illness. Many life insurance policies require that the medical certificates state you have a prognosis of either 12 or 24 months or less. Check your policy for the requirements for accessing your insurance.
Before changing, consolidating or cancelling any super accounts, keep in mind that it may be hard to get insurance cover again. Get legal or financial advice before making any decisions.