Freedom to switch super funds without losing your insurance
A common concern many Australians have is: “Will I lose my life insurance if I change super funds?”
Good news—you can switch super funds while keeping your life insurance intact. The process is straightforward when set up correctly, allowing you to maintain financial protection without being tied to a single fund.
Let’s break down how it works, why it matters, and what you need to do to ensure a seamless transition.
How super-linked insurance works
Many Australians hold life insurance through their superannuation. In fact, over 70% of life insurance policies in Australia are held within super (ASIC, Insurance in Super Report, 2021). This includes cover for:
✅ Life insurance (Death cover): Provides a lump sum payment to your beneficiaries if you pass away.
✅ Total & Permanent Disability (TPD) cover: Pays a lump sum if you become totally and permanently disabled.
✅ Income Protection: Provides a portion of your income if you're unable to work due to illness or injury.
These policies are often set up automatically by your super fund, but if you decide to switch funds, you could risk losing your insurance—unless you take the right steps.
How to switch super funds without losing your insurance
The key to keeping your insurance while switching super funds is setting up a policy that remains independent of any one fund. This is done through a retail insurance policy within super, which allows you to retain your coverage no matter which fund holds your retirement savings.
Here’s how it works:
1. Setting up insurance through a retail provider
Instead of relying on your super fund’s default group insurance, you can take out a retail insurance policy inside super. This is done through an insurance provider rather than the super fund itself.
✅ Your cover stays active even if you change super funds.
✅ You keep your health history locked in, meaning you won’t need to go through new medical assessments in the future.
“💡 Stat: The Australian Prudential Regulation Authority (APRA) reports that retail life insurance policies tend to have higher claims acceptance rates than group insurance within super (APRA, Life Insurance Claims and Disputes Statistics, 2024).”
2. Setting up an "Enduring Rollover"
Once you have a retail policy inside super, it needs to be funded. This is where an enduring rollover comes in.
✅ Every year, your insurance provider requests a small amount from your super fund to pay for your premiums.
✅ If you switch super funds, you simply sign a new form authorising the insurer to request payments from the new fund.
“💡 Fact: Super funds process millions of rollovers each year. According to the Australian Taxation Office (ATO), more than 1.4 million Australians changed super funds in 2023 alone (ATO, Superannuation Statistics, 2024).”
Why this matters for your long-term financial security
1. Protect your cover against future health issues
Once your retail insurance is set up, it remains in place regardless of any health conditions you develop later on. This is crucial because:
❌ If you rely on default super insurance and switch funds, you may need to reapply for cover.
❌ Any new health conditions could result in higher premiums or exclusions on your new policy.
✅ With retail insurance, your original health assessment stays locked in.
How to set up an independent super-funded insurance policy
To establish a retail insurance policy inside super, it’s ideal to work with a financial adviser. This isn’t just a rule we made up—Australian life insurance providers require financial advisers to facilitate these policies.
Why?
✅ Advisers ensure the structure is set up correctly so that your insurance stays intact when you switch funds.
✅ They compare policies across insurers to find the best fit for your needs.
✅ They handle the paperwork so your premiums are paid correctly through an enduring rollover.
💡 Fact: ASIC found that Australians who use financial advisers often get more suitable and cost-effective insurance cover compared to those who rely on default super policies (ASIC, Financial Advice Report, 2023).
Take control of your super and insurance today
Switching super funds shouldn’t mean losing your insurance. By setting up retail insurance inside super, you can:
✅ Keep your life, TPD, and income protection cover intact, even when you switch funds.
✅ Maintain your original health status, avoiding exclusions for future medical conditions.
✅ Enjoy investment flexibility by moving between super funds as needed.
💬 Got questions? Talk to a financial adviser about how to set up enduring rollover insurance for complete flexibility and peace of mind.
References
Australian Securities and Investments Commission (ASIC) - Insurance in Super 🔗 https://asic.gov.au/about-asic/news-centre/articles/insurance-through-super/
Australian Prudential Regulation Authority (APRA) - Life Insurance Claims and Disputes Statistics (2024) 🔗
https://www.apra.gov.au/life-insurance-claims-and-disputes-statistics
Australian Taxation Office (ATO) - Superannuation Statistics (2024) 🔗 https://www.ato.gov.au/super
Moneysmart (Australian Government) - Superannuation Guide 🔗 https://moneysmart.gov.au/how-super-works
ASIC Financial Advice Report (2023) 🔗 https://asic.gov.au/about-asic/news-centre/news-items/financial-advice-update-august-2024/