Understanding insurance through super

With access to group rates, insurance inside super can be cheaper than insuring yourself individually. Plus, you’ll sleep easy knowing you have a back-up plan should something hit you out of the blue.

In this article, we’ll explore:

  • What is insurance cover through super?
  • Cover types available to you
  • How insurance inside super works and how it can help you
  • Tailoring your insurance to suit you
  • Seeking free financial advice*


What is insurance through your super?

Simply put, it’s insurance cover that’s offered to you through your super fund. When an employer chooses a super fund for their workplace, they need to choose one that provides insurance cover to their employees.
If you’re an eligible CareSuper member, you’ll automatically receive standard cover when you join, subject to terms and conditions. Standard cover includes death cover (also known as life insurance) and total and permanent disablement (TPD) cover.

Income protection insurance isn’t included in standard cover, but you can apply for it at any time. Plus, if you’re a new member under 60 years old, you can apply to add income protection and increase your death and TPD cover up to seven times your total income*, to a maximum of $750,000. However, you’ll need to act quickly — this offer is only available for 90 days from the date you join CareSuper.

To check your cover with us, update or apply for cover, log in to your MemberOnline account. 

How insurance inside super works

As a CareSuper member, you have access to group insurance rates, which can be a cost-effective alternative to insuring yourself individually. Plus, if you’re eligible, you don’t need to provide medical evidence to receive standard cover.

With insurance inside super, your fees are deducted from your account instead of your take-home pay. Insurance fees paid through your super are tax deductible — helping you save on tax. Your account is credited with a 15% contributions tax deduction benefit on the insurance fees paid through your super. It also means you have one less bill or direct debit you need to worry about.

Discover your insurance cover options
Total and permanent disablement (TPD) cover

How it works:

If you get sick or injured and will never be able to work again, you'll receive a lump sum benefit payment. This can help cover your medical bills and make sure your family and home are financially secure.

Eligibility:

You need to be at least 15 and under 70 years old.

You'll receive TPD as part of standard cover automatically when you:

  • Are 25 or older
  • Your account balance reaches $6,000, and
  • You receive an on-time employer contribution.

Maximum payment:

$3 million.

How it's taxed:

The tax payable on a TPD benefit lump sum paid to you depends on your age, and the components of the lump sum benefit. No tax should be payable on the lump sum of you’re aged 60 years and over. If you’re under 60 years old at the time you receive the lump sum payment, tax may apply. The amount of tax that may be payable depends on the amount of the lump sum, and your age at the time of payment.


Learn more
Death cover

How it works:

If you’re diagnosed with a terminal illness or pass away, your beneficiary or beneficiaries will receive a lump sum benefit payment. This can support your loved ones when they need it most.

Eligibility:

You need to be at least 15 and under 75 years old.

You’ll receive death cover as standard cover automatically when you:

  • Are 25 or older
  • Your account balance reaches $6,000, and
  • You receive an on-time employer contribution.

Maximum payment:

$10 million. For a terminal illness, your claim is capped at $3 million, and the insured balance will be paid on death.

How it's taxed:

The death benefit is tax free and is paid to your dependant. A dependant includes your spouse, a child aged under 18 years old, or any person who was your financial dependant at the time of your death. A superannuation lump sum benefit payment to you if you’re suffering from a terminal medical condition is also not taxable. Where a superannuation death benefit paid as a lump sum to a person who is not your dependant, 17% tax (15% tax plus 2% Medicare) is withheld from the benefit.

Your death benefit is taxed differently when paid as an income stream.


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Income protection

How it works:

If you get sick or injured and are unable to work, you’ll receive a replacement income. You’ll receive regular payments as a percentage of your pre-injury or pre-health issue income. This can help you pay your bills while taking time off work to recuperate.

Income protection is designed to be a temporary replacement income. It doesn’t cover you if you’re made redundant or dismissed from your employment.

Eligibility:

You can apply for income protection if you’re:

  • At least 15 and under 70 years old
  • Earning at least $16,000 p.a. through ongoing work or work at least 15 hours each week, and
  • A full-time, part-time, self-employed or casual worker or contractor.

Maximum payment:

If eligible, 87% of your monthly pre-disability income (includes 12% super payments).

How it's taxed:

Income protection payments are taxed as ordinary income, just like your usual salary. We’re required to withhold tax from each payment based on the ATO tax tables. You’ll need to report your income protection payments in your annual income tax return and claim a credit for the tax withheld.


Learn more

HOW MUCH DOES INSURANCE COVER COST?

The cost of insurance is based on your gender, age, occupational category and chosen waiting period and benefit.

See your Insurance Guide and Fact sheet (if relevant) for details on the cost of cover including how it’s calculated and when it’s deducted from your account.

CALCULATING YOUR INSURANCE COSTS

See how much income protection insurance costs and how making changes could affect the fees you pay using our Insurance calculator.


Tailor your cover to suit you

Discover how tailoring your cover can help you save, and how it can help when you need it most. 

Aaron’s cover (CareSuper member) Dan’s cover
Married with kids, Aaron wanted to protect his family if something happened unexpectedly. He applied for income protection after seeking free financial advice through his CareSuper membership.* When Aaron had to take 5 months off work after a heart attack, he was able to still pay the bills with his income protection insurance benefit payments. Dan doesn’t have any dependants to provide for if he passes away, so standard death cover is enough for him. However, if Dan got sick or injured and had to take time off work, he may need help paying the bills. That’s why Dan applied for income protection insurance with a 30-day waiting period and a benefit period of up to 2 years. He could have applied for a longer benefit period of 5 years, but Dan has some savings for emergencies. Plus, a shorter benefit period has lower fees — which suits Dan’s personal circumstances.

You’re one of a kind, so we give you plenty of choice when it comes to tailoring your insurance cover.

Want better protection, a different type of cover to meet your circumstances, or maybe you don’t need as much? Discover your options when it comes to tailoring your insurance cover.


When your life changes, make sure your insurance does too

With life events cover, you can apply to increase your existing insurance cover at certain stages of your life when your circumstances change. This means if you’ve bought a home, got married, had a baby, or are going through a separation or divorce, you may be able to increase your existing death and TPD cover.
Plus, if you receive a pay rise, you can apply to increase your income protection cover with a confirmation letter from your employer of the salary increase amount and effective date, to the lesser of:

  • 25% of your current cover
  • $1,500 per month if you’re in the General occupational category or $2,000 per month if you’re in the Professional occupational category.

See if you’re eligible and view a full list of life events, and tailor your cover to suit you.

Free advice can help

If this has got you thinking about your insurance and what’s right for you, you have access to super-related advice over the phone at no extra cost.*

If you have questions broader than super, you can get in touch with a specialist financial planner who can help.^

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Insurance through super FAQs
What is age-based cover?

Your level of insurance cover is based on your age and occupational category, and changes as you get older. The fees are based on your age, gender and occupational category. See your Insurance Guide and Fact sheet (if relevant) for further information. 

What is fixed cover?

Your level of insurance cover will stay the same, but your fees will increase as you get older and be based on your age, gender and occupational category. See your Insurance Guide and Fact sheet (if relevant) for further information. 

What’s an occupational category?

There are two occupational categories: General and Professional. Your occupational category can make a difference to the amount or cost of your insurance cover. 

You automatically go into the General category. If the work you do is limited to professional, managerial, secretarial or similar ‘white collar’ tasks, you may qualify for the Professional category and receive more cover for a slight increase in fees or keep the same cover and pay less. See your Insurance Guide and Fact sheet (if relevant) for more information. 

What is a waiting period?

The time period from when you’re injured until you receive your benefit period.
You can choose a waiting period of 30, 60 or 90 days. Different fees apply depending on the waiting period you choose.

What is a benefit period?

The maximum amount of time you can receive your benefits, once the waiting period ends.

You can choose a ‘to age 65’ benefit period or 2-year or a 5-year benefit period. Different fees apply depending on the benefit period you choose.

How much insurance do I need?

It depends on your individual circumstances.
If you’re an eligible Employee Plan member, you’ll receive the standard level cover when you meet certain criteria, as outlined in your Insurance Guide and Fact sheet (if relevant). There are three levels of standard cover, depending on your employer: 100% standard cover, 125% standard cover and 150% standard cover.

However, it’s a good idea to review your insurance needs and apply to increase, decrease or cancel your cover accordingly. For more information read your Insurance Guide and Fact sheet (if relevant). You can also check out our Insurance calculator.

If you would like to speak to someone about your insurance needs, CareSuper members have access to general and limited advice over the phone, as part of their membership.*

Information correct as at 24 January 2024.

*Financial advice obtained over the phone, or through MemberOnline, is provided by Mercer Financial Advice (Australia) Pty Ltd (MFAAPL) ABN 76 153 168 293, Australian Financial Services Licence #411766.
^Advice is provided by one of our financial planners who are Authorised Representatives of Industry Funds Services Limited (IFS). IFS is responsible for any advice given to you by its Authorised Representatives. Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514.