Super lobby urges explicit insurance warnings

Mike Taylor

Managing Editor and Publisher

28 April 2026

The major superannuation fund lobby groups have sought to impress on Treasury the need for explicit warnings to superannuation fund members about the loss of their group insurance cover when switching funds.

Both the Super Members Council (SMC) and the Association of Superannuation Funds of Australia (ASFA) have used their responses to Treasury’s consultation around draft regulations for an advertising ban to drive home their point.

The SMC urged Treasury to considering making the insurance disclosure explicit in circumstances where “insurance is one of the biggest consequences of switching super funds”.

It said people making an onboarding decision are often less likely to understand or actively check their insurance coverage matches their work risk profile.

“Switching can materially change a person’s cover (amount of cover, exclusions, waiting periods, default cover levels) or, in some cases, result in cover ceasing if it isn’t replicated or if eligibility conditions aren’t met. A general “consider insurance” prompt does not reliably communicate that risk,” it said.

“Onboarding is a high-risk decision point where people may be in vulnerable circumstances, not financially literate, and can be guided by interface cues. If the prompt is vague, many will treat it as generic fine print and proceed. That undermines the policy objective of informed, member-first choices at onboarding.”

“Insurance harms are often irreversible or only discovered later, such as when a claim arises. The disclosure needs to function as an effective “stop and think” warning at the point of choice. The draft regulations already require “clear and unambiguous” disclosures to accompany permitted advertising; a short, plain warning about insurance consequences is consistent with that intent and would strengthen consumer outcomes,” the SMC said.

“A good, simple disclosure Treasury could encourage in guidance could be: “Warning: Changing super funds may change or cancel your insurance. Check your cover before you switch.”

ASFA said the regulations should mandate prominent, standardised insurance warnings and disclosures at onboarding which explicitly recognise the impacts of the loss or deterioration of insurance cover.

It said this should include:

1. A clear, mandatory disclosure where a member’s stapled fund may not provide appropriate insurance for their occupation or circumstances.
2. A prominent warning that insurance for people under 25 or with a low super balance will not be provided automatically unless you work in a hazardous job and your fund has a dangerous occupation exception.
3. A requirement to highlight key insurance differences, including hazardous occupations exclusions or inclusions.