Thinking about a super insurance claim? Consider these 9 things

One of the first things to check is whether your insurance cover is still active.

Many people are surprised to discover their insurance has ended without them realising. Finding this out when you're ready to make a claim can be incredibly frustrating, particularly when you're already facing uncertainty about your health and finances. It may also be too late to fix it.

Changes to insurance cover in superannuation

Legislative changes introduced in 2019 and 2020 have limited when super funds can provide insurance cover and, in some circumstances, require existing cover to be cancelled.

Since July 2019, super funds have generally been required to cancel insurance cover if a member's account does not receive a contribution for 16 consecutive months. This can affect people who have taken time away from work, changed jobs, consolidated accounts or lost track of an older super fund. Some funds also have additional requirements that may affect insurance cover, such as minimum account balances or their own inactivity provisions.

In April 2020, further changes took effect that generally prevent super funds from automatically providing insurance cover to members who are under 25 years of age or have an account balance below $6,000.

There are some exceptions to these rules. For example, members working in certain dangerous occupations may still receive default insurance cover where their super fund trustee has elected to provide it. Cbus, for example, has continued to provide default cover for eligible building and construction workers.

If you're unsure whether you have insurance through your super, we can help explain your entitlements and how these rules apply.

Age limits and employment changes

Most super insurance policies have age limits. For many policies, Total and Permanent Disability (TPD) cover and Income Protection cover ends at age 65, while life insurance cover may continue until age 70.

It's also worth checking your cover if you've recently changed jobs or moved between super funds. Changes to your super arrangements will often affect the insurance attached to your account.

How to check your cover

You can usually confirm your insurance by:

• logging into your super fund's online portal
• reviewing your latest annual statement
• checking your fund's Product Disclosure Statement
• contacting your super fund directly

If you've had more than one super account, it's important to check each one. You may have insurance through a fund you've forgotten about.

The type of claim available to you will depend on your circumstances and the insurance attached to your superannuation.

Most super funds automatically provide three main types of cover to their members by default.

Total and Permanent Disability (TPD)

A TPD claim may be available if an illness or injury has left you permanently unable to return to work within your education, training, and experience.

If approved, a TPD benefit is usually paid as a lump sum into your super account.

TPD claims can be complex because they often involve stringent policy definitions and detailed medical and other evidence that addresses the applicable definitions.

Understanding the eligibility criteria before lodging a claim can save time, money, and help you avoid unnecessary setbacks.

Income protection

Income protection insurance is designed to provide support if you're temporarily unable to work due to illness or injury.

Rather than a lump sum payment, the cover typically provides monthly payments for a defined period. Most policies include a waiting period before payments begin, which typically ranges from 30 days up to 6 months.

Death and terminal illness cover

Life insurance, often referred to as death cover, generally pays a lump sum to their dependants if a member passes away. If they are diagnosed with a terminal illness, an application can be made for payment of a Terminal Illness benefit before they pass away.

For families dealing with grief or a serious diagnosis, managing a claim can feel overwhelming. Having support throughout the process can help ease some of the pressure during an already difficult time.

This is one of the most important aspects of any superannuation insurance claim.

A claim is not assessed solely on whether you are injured or unwell. The insurer will consider whether you meet the specific definition contained within your policy.

"Any occupation" and "own occupation" definitions

Many superannuation TPD policies use what's known as an "any occupation" definition.

This means you must show that you're unlikely to be able to work in any occupation that is reasonably suited to your education, training or experience.

Even if you can no longer return to your previous role, a claim may be declined if the insurer believes you could work in another “suitable” occupation.

Some policies purchased directly from insurers and financial institutions use an "own occupation" definition instead. These policies focus on whether you can return to your specific occupation rather than any other suitable work. However, they are less common in superannuation-based insurance.

Waiting periods for income protection

Most income protection policies require you to be unable to work for a minimum waiting period before benefits become payable.

While you're waiting, it's a good opportunity to begin collecting the documents and evidence you'll need to give your claim the best chance of success.

Terminal illness requirements

For terminal illness claims, policies typically require certification from two medical practitioners confirming that your life expectancy falls within the timeframe specified by the policy, usually a prognosis of less than 12 or 24 months.

Understanding these requirements early can help you gather the right medical evidence.

Even when your insurance is active and your condition appears to meet the policy definition, exclusions may affect your claim. Common exclusions can include:

• certain pre-existing medical conditions
• self-inflicted injuries
• war or acts of terrorism
• occupation-specific exclusions

Importantly, the existence of an exclusion does not always mean a claim cannot succeed. The wording of the policy, the timing of your condition and your individual circumstances all matter.

If you're unsure how an exclusion applies to you, seeking advice can help you better understand your rights and give your claim the best prospects of success.

Medical evidence is at the heart of any superannuation insurance claim.

The insurer will carefully review the information you provide to determine whether your condition satisfies the requirements of the policy and will likely obtain its own evidence from your treating doctors and/or consultant medico-legal medical practitioners.

Common types of evidence

Depending on the claim, insurers may request:

• reports and records from your GP and treating specialists
• diagnostic imaging and pathology results
• hospital records
• functional capacity assessments
• psychiatric or psychological reports
• employment records confirming when and why you stopped working
• financial records such as payslips or tax returns
• insurers may also arrange an Independent Medical Examination with a doctor of their choosing

Why early evidence matters

Medical evidence obtained closer to the time you stopped working can often provide a clearer picture of your condition.

If you are struggling at work because of your illness or injury, contemporaneous notes or a diary about which duties you are struggling with, or what you are having to do to keep working (i.e. increasing medication, modifying your hours or relying more on co-workers), can be powerful evidence in support of an income protection or TPD claim.

Delays may create gaps in your records that can make claims more difficult to assess and succeed. Gathering evidence early can help strengthen your claim and reduce the likelihood of unnecessary delays.

Time limits can apply to superannuation insurance claims, and they can affect your rights if you wait too long to act.

Understanding limitation periods

In many cases, there are legal time limits for taking action if a claim is denied or disputed.

The relevant date is not when you first became aware of your entitlement. Depending on the policy wording, it may relate to when you stopped working, when a benefit became payable, or when the insurer made a decision.

If you're worried it's too late

It's important not to assume you've missed your opportunity to claim.

Even where significant time has passed, there may still be options available to you worth exploring.

The sooner you obtain advice, the easier it is to access evidence and understand where you stand.

A superannuation insurance payment can provide much-needed financial relief, but it's important to understand that tax may be payable on the benefit.

TPD benefits

The tax treatment of a TPD payment can depend on a range of factors, including your age and the structure of the benefit.

For some people, part of the payment may be taxable. For others, different tax concessions may apply.

Income protection payments

Income protection benefits are generally treated as taxable income.

As a result, the amount you receive after tax may differ from the amount initially approved under the policy.

Death benefits

The tax treatment of death benefits depends on who receives the payment and whether they are considered a dependant under taxation law.

Because the rules can be complex, obtaining financial advice before accepting a payment can help you make informed decisions.

Many people are surprised to learn that an approved insurance claim does not always mean immediate access to the funds.

When a TPD or life insurance claim is accepted through a super fund, the benefit is generally paid into your super account first.

A second assessment then takes place.

The insurer and trustee assessments

Typically, the process works as follows:

1. The insurer assesses your claim against the insurance policy.
2. If approved, the benefit is paid into your super account.
3. The trustee of your superannuation fund assesses whether a condition of release has been met under superannuation law.

The trustee will need to be satisfied that you meet a separate legal test before releasing the money to you. If they are not, the money will likely stay in your superannuation account until retirement, or until you meet another condition for early release.

Understanding this process early can help manage expectations and ensure your claim is supported by the right evidence from the outset.

If you're dealing with illness, injury, or the loss of a loved one, navigating a complex insurance claim can feel like one more thing to manage at an already difficult time.

The right support can help ease that burden. A financial adviser can help you understand your cover, assess the financial and tax consequences of a payment, and plan for the future.

A specialised superannuation and insurance lawyer can review your policy, explain your rights, identify all available claims, actively pursue those claims for you and assist if a claim is delayed, disputed or denied.

Your super fund can also provide information about your cover and their claims process.

Seeking advice before lodging a claim is often easier and more effective than trying to address problems after a claim has been rejected.

Possibly. What matters is whether you were insured at the time you stopped working or became ill or injured. Even if your cover has since ended, you may still have entitlements. It's worth checking before ruling out a claim.

Yes. If you've held multiple super accounts, you may also have held insurance through more than one fund. Each policy should be reviewed separately.

Timeframes vary depending on the complexity of the claim and the evidence required. Some claims can be resolved relatively quickly, while more complex matters may take 6 to 12 months.

Many people aren't sure where to start. Depending on your circumstances, you may be eligible for more than one type of claim. Understanding the cover attached to each of your super funds can help clarify and maximise your options.

A rejection does not always mean the end of the matter. You may be able to request an internal review, lodge a complaint with the Australian Financial Complaints Authority (AFCA), or issue court proceedings.

If your claim has been denied, we recommend seeking legal advice as soon as possible. Time limits may apply, and an experienced superannuation insurance lawyer can help you understand your options and determine whether the decision can be challenged.