Superannuation Provides Essential Life Insurance for Millions of Australians
Research from the Association of Super Funds Australia (ASFA) highlights the vital role of superannuation in providing essential life insurance coverage to millions of Australians. The study, titled “Providing cover to those who need it: The success of insurance in superannuation,” underscores the crucial protection offered through superannuation, which has enabled over six million individuals to access insurance they might not otherwise have.
ASFA’s findings revealed a welcome increase in group insurance coverage during the 12 months leading up to June 2024, following a prior decline. Currently, 8.8 million Australians benefit from life insurance through their superannuation, a rise of 300,000 from the previous year. Moreover, 8.1 million have access to total and permanent disability (TPD) coverage via their super, reflecting an increase of 400,000.
The association used historical opt-in rates of life insurance and TPD insurance in comparison to the current coverage levels provided through superannuation to determine that an additional six million Australians are now protected. This coverage helps shield households from financial strain.
Data from the Australian Prudential Regulation Authority (APRA) indicates significant payouts from group insurance cover through superannuation. In the year ending June 2024, a total of $1.7 billion in death benefit payments and $3.0 billion in TPD payments were made.
“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,” stated ASFA CEO, Mary Delahunty. “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.”
