The 36% hit to insurance inside super coverage

Mike Taylor

Managing Editor and Publisher

28 February 2024

The degree to which Government policy changes and particularly the Coalition’s Protecting Your Super and Putting Members Interest First measures have impacted insurance inside superannuation has been laid bare by new research.

The research, undertaken by the Association of Superannuation Funds of Australia (ASFA) has confirmed a 36% reduction in the number of lives insurance through superannuation for death benefits with a similar decline for Total and Permanent Disablement (TPD).

Releasing the research today, ASFA chief executive, Mary Delahunty said the issue would be discussed at a conference in Sydney today.

She said that Australia now faced a situation where fewer Australians and their families are covered by group insurance through superannuation.

Along with identifying the 36% reduction in coverage through group insurance, the ASFA research also pointed to the flow through effects on the broader economy saying the legislative changes had meant that there were 5,000 sets of beneficiaries of death benefits who missed out on payments of $655 million in aggregate in 2022-23.

The ASFA analysis said the reduction in the number of lives insured had been remarkably in line with ASFA’s expectation at the time of the legislative changes, which was a reduction of around 5 million individuals.