Millions unaware of life insurance safety net inside super

Binaya Dahal

Journalist

21 July 2026

Millions of Australians worried about their financial future could be unaware of the existing insurance safety net, with a new study showing most workers do not understand the life insurance cover included in their superannuation.

The Council of Australian Life Insurers’ (CALI’s) newly released sentiment tracker found two in five Australians feel uncertain about their financial situation over the coming year, yet only one in three say they understand the life insurance products and benefits attached to their super.

CALI’s chief executive, Christine Cupitt said insurance through superannuation was one of country’s most accessible forms of financial protection, but also its least understood.

“Many people may already have life insurance switched on inside their super, giving them access to death and disability cover,” Cupitt said.

“This protection may be quietly working in the background, but it isn’t a set-and-forget benefit. Your job, income, family, mortgage and working hours can all change, and your cover needs to keep pace.”

She said cost-of-living pressures meant some Australians could be tempted to reduce or cancel their insurance without understanding what they were giving up.

“People are dealing with a lot. Budgets are stretched, living costs are increasing and that could get worse if you are forced out of your income through illness or injury,” Cupitt said.

“That’s why we encourage people to regularly check their insurance cover rather than wait until their life gets turned upside down to find out what they do or don’t have.”

The study showed life insurers paid almost $6 billion through group superannuation policies over the past year, supporting around 54,000 claims from Australians and their families facing illness, injury, disability or death.

Cupitt said those figures highlighted the important role insurance inside super plays in protecting Australian households when the unexpected happens.

“Almost $6 billion in payments in 12 months shows this protection is not a minor consideration. It is an important part of Australia’s financial safety net,” she said.

She added Australians also needed easier access to reliable information about the insurance they already held, arguing many people could not afford professional financial advice.

“For many Australians, accessing a financial adviser is out of reach. But they should be able to get straightforward, professional help to understand the cover they have,” Cupitt said.