Insurance in super

Having insurance in your super is an easy way of helping ensure financial security for you and your loved ones if something happens to you.

Although superannuation is primarily a vehicle for you to save for your retirement, it also serves an important secondary purpose: it can allow you to access valuable insurance, often without the need for underwriting. This is particularly important for people with pre-existing conditions who may otherwise be charged much higher premiums or denied coverage altogether.

You may have access to several types of insurance in the Mercer Super Trust. While the types of coverage differ, they all share a common goal of providing financial security for you and your loved ones if something ever happens to you.

Although having insurance is an important first step, the key to financial security is ensuring you have a level of coverage appropriate for your personal circumstances. Unfortunately, research indicates that a significant number of Australians are currently underinsured1.

By taking steps to review and, if necessary, update your cover, you can enjoy peace of mind that you and your loved ones will be looked after.

Mercer Super’s insurance offering

Life is unpredictable, and, depending on what happens, different types of insurance may be appropriate. It’s because of this we offer three types of cover:

Death or Terminal Illness

Provides a lump sum payment to your loved ones if you pass away. If you are diagnosed with a terminal illness you can receive the lump sum payment early. 

Total and Permanent Disablement (TPD)

Provides a lump sum payment to you if, due to an injury or illness, it’s determined you will be unable to work for the rest of your life.

Income Protection (if available within your employer plan)

Provides you with consistent income for a period of time while you recover from an injury or illness that means you cannot work.

We also offer members the option to transfer insurance they hold with another super fund into their Mercer Super Trust account. You can do this by completing the ‘Individual Insurance Transfer application’ form. 

Please note that you should wait to receive written confirmation that your request to transfer your existing cover to your Mercer Super Trust account has been approved prior to rolling over your other super fund or cancelling your existing insurance.

Default insurance

Insurance coverage, such as Death, TPD and Income Protection (if offered by your employer plan) is often provided automatically when you open a Mercer Super Trust account as part of an employer plan. This coverage is provided without the need for you to go through underwriting. Although the coverage amount is typically based on factors such as age and income, it does not take into account any of your personal circumstances.

It’s important to note that this coverage may not automatically be applied to your account, as it is subject to the ‘Putting Members’ Interests First’ legislation outlined below.

Determining the appropriate level of cover

The key to any type of insurance is ensuring that your level of cover is appropriate for your personal circumstances. Having too little could leave you and your loved ones struggling to make ends meet if something happens to you, whereas having too much could mean higher premiums needlessly drain your super balance, leaving you with a lower balance when you retire.

When it comes to how much cover you need, there is no ‘one-size fits all’ figure. Determining the amount of cover that’s appropriate for you requires you to take into consideration personal circumstances such as, but not limited to, annual income, dependent children, as well as any mortgages and other debts.

To help you determine how much cover you may need we’ve made available a calculator from one of our insurers, AIA Australia, which can take into account your circumstances to provide you with an idea of the level of cover you may need.

Benefits to insurance within super

In addition to providing financial security for you and your loved ones, there are other benefits to having insurance within your super account:

  • Premiums are automatically paid from your super balance, so there’s no need to remember to pay them or factor them into your everyday budget.
  • Automatic and default cover is often provided without the need for underwriting and health-related checks.

Rules relating to insurance within super

On 1 July 2019 the Australian Government passed a set of legislative reforms that were designed to ensure members’ balances weren’t eroded by premiums for cover they were either unaware of or didn’t require.

Protecting Your Super

Under the Protecting Your Super legislation, if your super account doesn’t receive any contributions or rollovers for 16 consecutive months we are required to cancel your cover unless you tell us otherwise. We will write to you prior to cancelling any cover, providing you the opportunity to retain it.

Putting Members’ Interests First

Under the Putting Members’ Interests First legislation super funds are unable to automatically place default cover on your account if you are under age 25, or have an account balance under $6000. If you are under age 25, or have an account balance under $6000 and would like default cover, please log in to your online account and complete the ‘Adjusting your insurance cover’ form located in the ‘Documents’ section.

Fact sheets

For more information about the automatic insurance cover offered through your super or exploring other insurance options that’s right for you, please refer to the fact sheet applicable to your Plan:

We’ve also put together some answers to these FAQs about insurance through your super.

Frequently asked questions

  • How do I apply for, check, change or cancel cover?

    You can apply for, check, adjust, opt-out or cancel your cover within the insurance section of your online account. Alternatively, you can call our Helpline on 1800 682 525, 8am-7pm, Monday-Friday (AEST/AEDT).

  • How much are my current insurance premiums?

    You can check your monthly insurance premiums within the insurance section of your online account. Alternatively, you can call our Helpline on 1800 682 525, 8am-7pm, Monday-Friday (AEST/AEDT).

  • When does my cover start?

    Your cover will start from the date that it is applied to your account. You can check when your cover started by calling our Helpline on 1800 682 525, 8am-7pm, Monday-Friday (AEST/AEDT).

    Alternatively, when your cover started we would have sent you a dated letter outlining the types and amount of cover applied to your account.

  • How do I make an insurance claim?

    You can start the claims process by visiting our dedicated claims page. Here, you will find information outlining the necessary steps to follow, frequently asked questions, and helpful guidance to assist you throughout the claims process. 

  • Can I transfer my cover from another super fund?

    You may be able to transfer any existing Death, Death and TPD or TTD cover that you may hold with other super fund(s) or insurance policies to your existing membership under your Plan (subject to limits, conditions and approvals).

    Please call our Helpline on 1800 682 525, 8am-7pm, Monday-Friday (AEST/AEDT) for details on how you can transfer any existing cover to your Plan membership.

  • What is underwriting?

    Underwriting is the process where the insurer considers your application for cover by taking into account  your lifestyle, current health, salary, as well as yours and your family’s medical history. You provide this information by completing a personal statement and sometimes the insurer may ask for additional information based on their assessment. Once they have obtained all the relevant information the insurer will then either accept, decline or impose special conditions for the amount of cover that is subject to underwriting.  

  • Are there any standard exclusions that automatically apply?

    Yes, there are a small number of exclusions that automatically apply to cover (such as being involved in a war). Should the exclusion have caused, wholly or partly, directly or indirectly the event for which you are making a claim, the benefit will not be payable.

    For further information on exclusions that automatically apply to your insurance please review the ‘Insurance Booklet’ located within the ‘Documents’ section of your online account.

  • What is the Insurer’s Claims philosophy?

    For most members in the Mercer Super Trust, your Plan’s insurance is provided through a group insurance policy with AIA Australia Limited ABN 79 004 837 861 AFSL 230043. Learn more on the AIA Australia website.

    Please refer to your Insurance Booklet, which can be found when you log into Member Online, for which insurer provides cover for your plan.  For Plan’s whose insurance is not provided by AIA:

1. Rice Warner - New research shows a large underinsurance gap

This document has been prepared and sent on behalf of Mercer Superannuation (Australia) Limited (‘Mercer Super’), ABN 79 004 717 533, Australian Financial Services Licence #235906, the trustee of the Mercer Super Trust ABN 19 905 422 981. Any advice contained in this document is of a general nature only, and does not take into account the personal needs and circumstances of any particular individual. Prior to acting on any information contained in this document, you need to take into account your own financial circumstances. Please consider the Product Disclosure Statement, Product Guide, Insurance Guide, and Financial Services Guide before making a decision about the product, or seek professional advice from a licensed, or appropriately authorised financial adviser if you are unsure of what action to take. 'MERCER' is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917. Copyright 2022 Mercer LLC. All rights reserved.