Super offers life insurance protections for further 6m Aussies: ASFA

New research from the Association of Super Funds Australia (ASFA) has found the insurance provisions through superannuation provide “critical protection” for six million Australians who would have otherwise been uninsured.

The research paper, Providing cover to those who need it: The success of insurance in superannuation, indicated that group insurance coverage levels have increased in the 12 months to June 2024 after experiencing a previous fall.

Currently, 8.8 million Australians have life insurance through their super, up by 300,000 from the previous year. Similarly, 8.1 million people have total and permanent disability (TPD) coverage through insurance, up by 400,000 from the previous year.

The association said it compared historical opt-in rates of life insurance and TPD insurance with current coverage levels through super to determine that a further six million Australians are covered and their household spending is not affected it is included in their super.

In the year to June 2024, data from the Australian Prudential Regulation Authority (APRA) found that a total of $1.7 billion in death benefit payments and $3.0 billion in TPD payments were products of group insurance cover through superannuation.

“ASFA’s research shows superannuation is not only helping Australians achieve a dignified retirement, it is also protecting millions of people who would otherwise fall through the net,” ASFA CEO, Mary Delahunty, said.

“It is pleasing to see the growth of coverage for people. What this means is that more Australians have their lives and livelihoods protected, and this provides great relief for families.

“Of course, it also provides relief to the social security system that would otherwise be under greater pressure without these levels of cover.”