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Help your staff make the most of their super: Review insurance in super

March 10th, 2020

Your employees may not be aware, but they likely received a ‘default’ level of insurance cover for death and total and permanent disablement (TPD) when they joined their super fund. This provision was introduced as part of the Federal Government’s “Stronger Super” reforms in October 2012.

Seven years later on, Protecting Your Super Package (PYSP) legislation introduced on 1 July 2019 mean that super members whose accounts have not received a contribution or a rollover (i.e. have been inactive) for more than 15 months may lose their insurance in super.

Taking this a step further, the Putting Members’ Interests’ First (PMIF) reforms come into effect on 1 April, which may also see workers with super balances under $6,000 lose their insurance in super unless they opt in to keep it.

With both of these laws, super funds have been required to send numerous communications to affected members – and in some cases, members will receive letters and/or emails because they fall into both PYSP and PMIF categories.

If one of your workers is a First Super member and falls into one of the above categories, they can discuss any queries with our Member Services Team on
1300 360 988.

What do my workers need to consider?

The PYSP and PMIF laws provide the ideal opportunity for your staff to review their personal insurance arrangements, both inside super and any stand-alone policies.

Although it might not be nice to think about, what would happen if they lost their ability to earn an income? Or how would their dependants manage financially if they died?

Factors to think about

  • What cover do they have now?
    Do they know if they have enough insurance cover to support them or their dependants if the worst were to happen? First Super also offers Income Protection – cover for if members were sick or injured and unable to work for a period of time?Members can check their level of insurance with their super account on their annual member statement or by contacting their super fund’s contact centre.
  • What about insurance in other super funds?
    If an employee has more than one super account, they may be paying for multiple insurance policies.It may be better for them to combine their super balances into one account, paying only one set of fees, and having just one insurance benefit. On the other hand, one policy might offer more valuable benefits than another and it could be in their best interests to keep the extra super account for that extra cover.We recommend that members seek financial advice to find out what would be best for their personal circumstances.
  • How much cover do you need?
    For First Super members, information on how to work out how much cover they might need is on the Insurance section of our website. Our calculator can also help members get an estimate based on their actual figures.

What are the benefits of insurance inside super?

  • Premiums are deducted from your super balance. 
    This means there is no impact on take-home pay and it’s a tax-effective way of paying for it (super is taxed at 15%, whereas marginal tax rates are often higher).
  • It’s cheaper
    Life insurance held within super is usually less expensive than seeking it out as an individual. As super funds buy one policy to cover a large group of people, members pay less for cover than if they were buying the policy themselves.

Where can I get more help?

If your staff are unsure where to start with insurance, as a First Super member they can access complimentary advice available through our Financial Planners to work out what is best for them. To book an appointment, they can simply call our Member Services Team on 1300 360 988 or fill in the online form on our Advice web page.

First Super also has a team of Business Development Managers and Member and Employer Services Coordinators based around the country. They can visit you or our members at your workplace to help to explain options in super and help with completing forms, as well as providing general advice and running information sessions. Contact our Employer Services Team to book a call back.


This article was issued by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988), as Trustee of First Super (ABN 56 286 625 181). It may contain general advice that has been prepared without taking into account your objectives, financial situation or needs. You should consult the Product Disclosure Statement (PDS) before making any investment decision. Content was accurate at the date of issue, but may subsequently change. Please contact First Super’s Member Services Team on 1300 360 988 for updated information or to obtain a copy of the PDS.