Insurance is a choice
In the past, insurance in super was generally provided automatically to anyone who signed up to their employer’s super plan (this is sometimes called default cover because members don’t need to answer health or lifestyle questions to get insurance).
But the rules have changed with updates to super laws. These laws aim to protect certain super accounts from being eroded by the costs of insurance that some people may not want.
As a result, to be eligible to receive automatic (default) insurance with your employer super plan these days, you must:
- be 25 years old or over,
- have a balance of at least $6,000 in your super account, and
- have had a contribution or rollover made into your account within the last 16 months
In most cases, as soon as you meet these eligibility requirements, your insurance will be applied automatically (but you’ll be given the chance to tell us if you don’t want it).
Why choose insurance in your super
Life can feel too short to worry about what if’s. But taking a few minutes to think about how you’re going to protect yourself if something does happen, will help give you peace of mind that you’re prepared.
One of the most common ways Australians are covered, is with insurance in their super. In fact, almost 70% of Australians who have life insurance hold it through their super and in 2020 over $5bn was paid in insurance claims to super members1. Learn more about insurance in super including the benefits and considerations.
How insurance inside super works
Insurance in super is provided through and paid for via your super balance.
It’s often offered as part of an employer’s super plan, as something they’ve negotiated for you and their other employees (called a group insurance policy). Group insurance is generally considered the number one way for Australians to access affordable insurance without needing underwriting3.
Your super account may offer:
Which provides a lump-sum payment if you
pass-away or become terminally ill.
Which provides a lump-sum payment if you suffer a disability preventing you from ever working again.
Which generally provides a replacement income of up to 75% of your regular income, if you can’t work due to illness or injury.
There are a number of things to consider when it comes to getting insurance in super – like what kinds and levels of cover are appropriate for your needs, and how your super balance can start to reduce over time if sufficient regular super contributions aren’t being made. Read the list of benefits and considerations for insurance in super.
How to get insurance
If you’re in an AMP Super plan and would like insurance but aren’t eligible for it yet, there may be some good news:
- Within the first 120 days of starting your job - if you tell us you’d like insurance in your super, it could be given to you without requiring you to provide any health or lifestyle information2.
- After 120 days of starting your job, you can apply for insurance, but you may be asked to provide some health and lifestyle information4. You can also wait until you are age 25, with a super balance over $6,000 and if you are actively contributing to your account, insurance will generally be applied automatically.
Deciding whether you’ll take out insurance is a big decision, so please read the important details below. More information about the insurance provided through your plan is in your AMP super welcome pack and Product disclosure statement, including your insurance guide fact sheet. Alternatively, you can call us.
Apply online
Call us
Speak to a super coach
Important details
Please read your AMP super welcome pack and PDS, including your insurance guide fact sheet, or your plan summary (found online at My AMP) for specific details about the insurance provided with your AMP super account and the eligibility rules.
Insurance inside super
| How do I find out how much super and insurance I have? | Login to My AMP using your account number. You can also find your super and insurance details in your annual statement, insurance confirmation letter, or by calling us on 1300 363 267. |
Super laws for insurance in super
Why were insurance in super law changes introduced? |
The cost of insurance in super is usually paid from the super balance. Some people don’t realise they have this insurance or that they’re paying for it. |
What’s in the super laws? |
Some key changes to super laws are:
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What if I decide to cancel my insurance later on?
You can cancel your insurance at any time. If you wish to cancel some or all of your insurance, there are some things you’ll need to consider. Learn more about cancelling insurance before you decide.
What if I have insurance in another super account?
If you already have insurance with another super fund, you may want to consider if you still need it. You can apply to replace insurance from your other fund, so that it’s all in the one place with AMP.
Your financial adviser can help you with determining your insurance needs, or learn more about managing insurance. Alternatively you can contact us.
What else do I need to know?
How do I know what’s right for me? |
If you do get insurance, it’s important to understand it, to know what’s right for you. Here are some things to think about:
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What impact does insurance have on my super? |
If you get insurance in your super, you need to keep in mind that your insurance premiums will be paid from your account which can reduce (or erode) your super balance over time. |
Where can I get more information?
How do I get in touch? |
Call us with any questions on 1300 363 267 or email us at askamp@amp.com.au.
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Speak to a super coach
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If you have an AMP super account, you can learn more about your super by booking a complimentary 20-minute session with one of our super coaches. |
Case study
Please note: These examples are made up, and everyone’s circumstances are different. Please consider your individual circumstances before deciding whether insurance inside super is right for you.
Phil and Emily got a new job
Phil and Emily are good mates. They’re both 19 and started their new job at the local department store in the same week. They rent an apartment together with two other people, while studying.
They joined their employer’s super plan, which included Life insurance, TPD and TSC insurance as part of the plan.
However, because they were under 25 with a super balance below $6,000, neither were eligible for automatic insurance, unless they asked for it.
Phil decided he wanted to sign up for the insurance inside super, and Emily decided not to take it.
Phil’s journey
Phil understood that the monthly cost of the insurance would come out of his super. Phil didn’t really feel the cost of this in his daily life, because the payments weren’t coming out of his take-home pay. But it did affect the speed at which his super grew, because the insurance payments were covered by his super contributions.
Two years into working at the department store, Phil and Emily went on a ski trip and Phil shattered his thigh bone. Fortunately, because Phil had TSC insurance, Phil was able to claim 75% of his salary, after a waiting period, while he recovered and could still afford to pay rent and keep studying.
Emily’s journey
Unlike Phil, Emily decided not to take insurance in her super. She was keen to grow her super balance as fast as possible while she was young (Emily was a big believer in the power of compound interest, and understood that the more money she invested into her super early, the bigger it might grow).
When Emily saw Phil’s accident on the ski slopes, and how insurance helped him during recovery, she reviewed her insurance needs. In that time, she also found out about a health condition she had, and since she was no longer eligible for automatic cover, she would have to go through a series of health and lifestyle questions before receiving insurance. She found out that if her insurance application was accepted, her pre-existing condition may not be covered.
Instead, Emily decided to put money aside for a rainy day. As it turned out, she was glad she did. When Emily turned 25, her super balance was well over $6,000 and she automatically became eligible to receive the full cover of insurance in her super. This is because the terms and conditions of her particular plan, allowed her pre-existing condition to be fully covered, after she performed her normal role, full-time for 30 days.
Phil and Emily’s insurance choices
What you need to know
1 Life insurance in superannuation: Improving outcomes for members | APRA
2 Subject to terms and conditions.
3 ‘Fiscal Impacts of Removing Insurance in Superannuation' Rice Warner 2018
4 If your plan is insured by Metlife, AIA or Zurich and you joined after 1 July 2022, you will not need to go through underwriting.
Products in the AMP Super Fund and the Wealth Personal Superannuation and Pension Fund are issued by N.M. Superannuation Proprietary Limited (N.M. Super) ABN 31 008 428 322 (trustee), which is part of the AMP group.
This information is provided by AWM Services Pty Ltd ABN 15 139 353 496, AFSL No. 366121 (AWM Services) and is general in nature only. It hasn’t taken your financial or personal circumstances into account. It’s important to consider your personal circumstances and read the relevant Product Disclosure Statement, Target Market Determination or Terms and Conditions available from AMP at amp.com.au or by calling 131 267, before deciding what’s right for you.
You can read our Financial Services Guide online for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. You can also ask us for a hardcopy. All information on this website is subject to change without notice. AWM Services is a part of the AMP group and can be contacted on 131 267 or askamp@amp.com.au.