Is Insurance Inside Superannuation Right for You?

Many Australians first encounter life insurance, income protection, or TPD cover through their super fund. On the surface, it seems simple—premiums are deducted from your balance automatically, and you don’t have to think about applying.

But more and more people are now asking:

• Am I paying too much for insurance inside my super?

• Is the cover enough for my family’s needs?

• Would I be better off holding insurance outside super?

At Covermate Life, we specialise in answering exactly these questions.

The Pros of Insurance Inside Super

✔ Convenient – premiums are paid from your super balance, not your take-home pay.

✔ Automatic cover – many funds provide default cover without medical checks.

✔ Group pricing – sometimes lower premiums due to bulk policies negotiated by the super fund.

✔ Cash flow friendly – doesn’t reduce your day-to-day household income.

The Cons – and Why People Are Concerned About Cost

• Eats into your retirement savings – premiums reduce your future super balance.

• Limited definitions – group policies often have stricter conditions than personal insurance.

• Not always tailored – default cover may not be enough for your mortgage, family, or lifestyle.

• Cost blowouts – premiums inside super can rise quickly with age, sometimes costing more than comparable outside policies.

Many Australians are now discovering that what seemed “cheap and easy” has become expensive and restrictive.

Real Questions Australians Are Asking

• “My insurance inside super doubled in a year—am I being ripped off?”

• “Why is my super balance dropping so much?”

• “Would a broker help me find cheaper or better cover?”

• “Is insurance inside super actually worth it, or should I move it outside?”

If you’ve asked these questions yourself, you’re not alone. Thousands of Australians are realising they may be over-insured, under-insured, or simply paying too much.

How Covermate Life Helps

At Covermate Life, we provide independent, personalised reviews of your insurance arrangements. Here’s how we help:

1. Review Your Current Super-Based Cover – we explain what you’re actually covered for and how much it’s costing you.

2. Compare With Alternatives – we benchmark your cover against leading insurers outside super to see if you could save or get better protection.

3. Tailored Recommendations – not just cheaper, but the right balance between cost and cover.

4. Ongoing Support – as your life changes, we help keep your insurance relevant and affordable.

   
   

Should You Keep Insurance Inside Super or Move It Out?

There’s no one-size-fits-all answer. For some, super is the most cost-effective way to hold cover. For others, it drains retirement savings and provides limited protection.

The key is to review your situation regularly with a specialist adviser. That’s where Covermate Life comes in.

Next Steps

If you’re worried you might be paying too much for insurance inside your superannuation—or if you’re unsure whether your cover is even appropriate—don’t leave it to guesswork.

📞 Call Covermate Life today for a confidential review, and find out whether you’re really getting value for money from your insurance.

FAQs – Insurance Inside Super

Q: Why are my super premiums increasing so much? A: Group policies inside super often increase with age. Outside cover can sometimes provide more stable pricing.

Q: Will cancelling insurance in super save me money? A: It might save premiums, but you risk being uninsured. The best approach is a tailored review.

Q: Does insurance inside super reduce my retirement savings? A: Yes—premiums are deducted from your balance, which means less money growing for retirement.

Q: Can I have insurance both inside and outside super? A: Yes, and in many cases, a mix provides the best balance of cost and cover.

Q: How do I know if I should switch? A: Speak to Covermate Life. We’ll compare your options and make a recommendation that’s right for you.