What They Don't Tell You About Insurance Inside Super
Most Australians have insurance inside their super and have no idea what it covers, what it excludes, or whether it would pay out when they need it most.
Same injury. Very different outcomes.
Two people slip off a ladder at home cleaning gutters. Herniated disc, surgery required, out of work for 8+ months. No WorkCover because it wasn't a work injury. Both have insurance inside their super.
Had their cover reviewed with an adviser 2 years ago
Their adviser upgraded TPD from "any occupation" to "own occupation" and added income protection with a 30-day waiting period. Full medical disclosure completed during underwriting.
Income protection paid 75% of salary from day 30. Family never missed a mortgage payment.
Never touched their default super insurance
Default TPD was "any occupation," meaning they'd need to prove they couldn't do any job at all. With a back injury, they could technically do sedentary work. Claim denied.
No income protection in place. It had lapsed due to low balance. Eight months, no income, savings gone, mortgage behind.
Hypothetical scenarios for illustrative purposes only. Not work-related, so WorkCover does not apply. Actual outcomes depend on individual policy terms.
Not sure which category you fall into?
A 15-minute call can tell you whether your cover would actually pay out.
Three things that decide whether your insurance pays out
Most people think having insurance means they're covered. In practice, three factors decide what happens at claim time.
Exclusions
Conditions or scenarios your policy won't cover. If excluded, a claim can be denied outright.
Loadings
An increased premium because the insurer considers you higher risk. You're covered, but paying more for it.
Underwriting
The process where insurers assess your health, lifestyle, and occupation to set your terms.
What actually happens when you make a claim
The insurer doesn't just look at what happened. They look backwards at everything that led to this point.
They review your original disclosures from when you applied or were auto-enrolled
They check your policy terms including TPD definitions and benefit periods
They assess any exclusions or loadings applied to your policy
If something wasn't disclosed properly, or a condition is excluded, the outcome can change significantly. This is why people only find out there's a problem when it's too late to fix it.
Insurance types explained in plain English
Before you can check whether your cover is right, you need to understand what each type actually does.
TPD: Own Occupation vs Any Occupation
The single biggest factor in whether a TPD claim succeeds or failsTotal and Permanent Disability (TPD) pays a lump sum if you become permanently unable to work. But the definition of "unable to work" varies hugely.
Income Protection
Replaces your income if you can't work due to illness or injuryPays up to 75% of your pre-disability income for a set period if you're unable to work. Two key variables to understand:
Waiting period: How long before payments start. Can be 30, 60, 90, or even 180 days. A 180-day wait means six months with no income before you see a cent.
Benefit period: How long payments continue. Can be 2 years, 5 years, or to age 65. A 2-year benefit period on a permanent injury leaves a long gap.
Life Insurance (Death Cover)
Pays a lump sum to your beneficiaries if you dieMost super funds include default life cover. The amount varies, often based on your age and a formula set by the fund. Key things to check:
Is the amount enough? Default cover might be $200K, but if you have a $600K mortgage and two kids, that's a significant shortfall.
Who are your beneficiaries? If you haven't nominated anyone (or your nomination has lapsed), the trustee decides who gets the payout. That might not be who you'd choose.
Inside vs outside super: Life cover inside super is paid from your super balance (tax-effective contributions). Outside super, you pay from after-tax income but may have more flexibility on terms.
Trauma / Critical Illness
Lump sum if diagnosed with a specified critical illnessPays a lump sum on diagnosis of conditions like cancer, heart attack, or stroke. Unlike TPD, you don't need to prove you can't work. The diagnosis itself triggers the payout.
Health Insurance vs Insurance Inside Super
They cover completely different thingsHealth insurance (private hospital, extras) covers the cost of medical treatment: hospital stays, surgery, dental, physio.
Insurance inside super (life, TPD, income protection) replaces your income or pays a lump sum if you can't work or die. It has nothing to do with medical bills.
Now that you know what to look for
Sevy can review your actual cover in 15 minutes and tell you where the gaps are.
Can you answer these four questions about your cover?
If you can't confidently tick all four, your insurance may not do what you think it does.
Do you know your TPD definition?
"Own occupation" and "any occupation" sound similar but the difference can mean everything at claim time.
Do you know your income protection waiting period?
Waiting periods range from 30 to 180 days. That's up to six months without income before a dollar is paid.
Do you know what's excluded from your policy?
Exclusions often cover common conditions: back injuries, mental health, pre-existing issues.
When did you last review your cover?
A policy right 3 years ago may not be right today, especially if your income, family, or health has changed.
If you couldn't tick all four: you're not alone. Most Australians can't. But it means there are gaps in your cover you don't know about yet.
Download: Your Personal Insurance Review Checklist
A one-page action sheet with exactly what to check in your PDS, what to ask your fund, and the specific things to look for. Take it with you.
Insurance is not "set and forget."
These three things determine whether your insurance works when you need it. Most people don't find out until it's too late. A 15-minute review conversation can change that.
Not sure what your policy actually covers?
A quick review with Sevy can identify gaps, exclusions, and opportunities you didn't know existed.
No obligation. No cost. No personal advice given in this call.
General Advice Warning: This page provides general information only and does not constitute personal financial advice. Insurance coverage, terms, and conditions vary by provider and policy. Always refer to your Product Disclosure Statement (PDS) for specific details. OakView Financial Pty Ltd | AFSL 513068. Consider seeking personal advice from a licensed financial adviser before making decisions about your insurance.
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