Is Your Super Insurance Actually the Cheapest Option?
15 Apr 2026 • General Knowledge
Like most Australians we assumed that life insurance inside super is the cheapest option available. It's bulk-bought, automatic, and it feels like a no-brainer.
But recently we started hearing some complaints. So, rather than guess, we compared default cover across 10 major super funds with equivalent retail cover at ages 30, 40, and 50. The answer depends heavily on your age, and it might not be what you expect.
What We Found
Age 30, Super still wins (mostly...)
At younger ages, default super cover is cheaper. Insurers price group cover on the basis that most 30-year-olds are reasonably healthy, so the bulk discount still delivers value here. Even after Keep's 12.5% cashback brings the cheapest retail option to $194/year, four of the most popular funds (Acclaim, REST, Cbus, AustralianSuper) come in cheaper, but the margin is thin.
Age 40, The tables turn
By 40, the bulk pricing advantage has largely gone. Retail insurers price more selectively as you get older, and if you're healthy and in a desk job, that starts working in your favour. The cheapest retail option after cashback ($205/year) now beats 8 of the 10 super funds in our comparison. Only Hostplus and CareSuper remain genuinely competitive.
Age 50, It's not even close
At 50, some of the most popular super funds have become remarkably expensive. AustralianSuper costs $1,112/year. QSuper is $1,709. BUSSQ hits $3,115, for the same $250,000 cover. The cheapest retail option after cashback, at $553/year, beats all but one (CareSuper). Even the most expensive retail insurer after cashback ($584/year) is cheaper than 7 of the 10 funds in our comparison.
The Full Comparison
$250,000 death cover + $250,000 TPD · male · white collar · non-smoker · annualised premiums · April 2026.
| Fund / Insurer | Age 30 | Age 40 | Age 50 |
|---|---|---|---|
| Retail, cheapest (Encompass) | $222 | $234 | $632 |
| After 12.5% cashback | $194 | $205 | $553 |
| Retail, most expensive (TAL at 30–40, Zurich at 50) | $397 | $357 | $667 |
| Note: TAL and AIA premiums include a policy fee which adds to their quoted price, and skews them higher at younger ages | |||
| Super funds | |||
| Acclaim Super | $122 | $208 | $625 |
| REST Super | $148 | $419 | $916 |
| Cbus Super | $150 | $451 | $891 |
| AustralianSuper | $155 | $341 | $1,112 |
| Hostplus | $182 | $236 | $828 |
| CareSuper * | $185 | $230 | $472 |
| QSuper † | $276 | $649 | $1,709 |
| Brighter Super | $282 | $450 | $1,175 |
| ART | $320 | $431 | $743 |
| BUSSQ | $460 | $932 | $3,115 |
* CareSuper figures are net of the 15% tax benefit on super premiums. Gross equivalent is approximately $218 / $271 / $556.
† QSuper uses the default unrated rate. Age 50 cover is approximately $192,000, not $250,000, the cost for full $250k cover would be higher.
Source: Keep Insurance quote engine, April 2026. Super fund rates from published member rate tables, white collar occupation where available. Retail quotes are year-1 prices; some insurers apply entry discounts in year 1 and ongoing rates may be slightly higher.
Why Does This Happen?
Super funds insure everyone in the fund, healthy people, people with health conditions, higher-risk occupations, people with a history of claims, that is the beauty of super cover. So, the premium you pay is a group average. If you're healthy and sitting at a desk, you're partly subsidising everyone else.
Retail insurers ask health questions and price you individually. At 30 that doesn't make much difference, but at 40 and 50, it does. The group average in super keeps rising to cover the whole membership.
It's not a flaw in the super system, it's just how group insurance works. But it's worth knowing.
Price Is Only Part of the Story
The cover itself is often different too, and not always in super's favour.
The TPD insurance inside most super funds uses an "any occupation" definition. To claim, you have to be permanently unable to work in any job, not just your own. Retail cover can be structured through super but also include an "own occupation" component (superlinking), where you only need to be unable to return to your own line of work.
Default super cover is also often unitised, the dollar amount of cover can fall from your mid-30s onwards, even as the premium rises. You may be paying more each year for less cover than you started with. Check your member statement.
And if you weren't "at work" when you joined your fund, maybe you were on leave, between jobs, or just joined, your cover may exclude pre-existing conditions for the first two years. Retail cover, properly underwritten at application, doesn't carry that rolling restriction once the policy is in place.
Beyond that, retail cover is yours regardless of what happens with your employer or fund. Default super cover can be reduced or cancelled if you change jobs, switch funds, or your balance runs low. That portability matters more than most people realise, more on this in the FAQs below.
A few things worth knowing
This comparison uses retail quotes at year-1 prices for a healthy male in a white collar occupation, no loadings, no exclusions. If your health has changed or you work in a higher-risk job, retail underwriting may produce a different result.
The Takeaway
Super insurance made sense when you joined, it probably still does at 30. But the economics shift as you get older, and most people never check. If you're in your 40s or 50s, in good health, and haven't looked at this in a few years, there's a reasonable chance you're overpaying, for cover that may not be as strong as you think.
It's worth spending five minutes to find out.
Frequently Asked Questions
Is life insurance through super really cheaper? +
It depends on your age. At 30, super is generally cheaper across most funds, the group pricing advantage holds. By 40, most retail options are cheaper than most super funds. At 50, retail is cheaper than almost every fund in our comparison, sometimes by a significant margin. The retail range also matters, even the most expensive retail insurer is cheaper than 7 of 10 super funds at age 50.
What happens to my super insurance if I change jobs? +
This is one of the less-talked-about risks. When you change jobs your super fund may change too, and with it, your insurance. If your new fund has different default cover, you may end up with less cover than you had, or a different waiting period before pre-existing conditions are covered. If you leave a fund and your balance runs too low, cover can lapse altogether. Retail cover is attached to you personally, not your employer or fund, it stays in place regardless of where you work.
How do I check if I have life insurance in my super? +
Log into your super fund's online portal or check your last member statement, your cover details will be listed there, usually showing the type of cover (life, TPD, income protection), the sum insured, and the annual premium being deducted. If you're unsure which fund you're with, myGov links to the ATO's super lookup tool which shows all your super accounts.
Is life insurance in super tax deductible? +
Not directly, you can't claim a personal tax deduction for super insurance premiums the way you can for income protection held outside super. However, the premiums are paid from your super balance, which is funded by pre-tax employer contributions (and your own pre-tax salary sacrifice if you make them). That gives super insurance an indirect tax advantage. The effective after-tax cost depends on your tax rate and how your super is funded. Some retail policies, income protection in particular, can be tax deductible when held outside super. Life and TPD are generally not.
Can I have life insurance in super and also hold a separate retail policy? +
Yes, there's no rule against holding both. Some people keep their default super cover (because it's automatic and low-cost at younger ages) and add a retail policy on top to top up their cover or get better policy terms. Just be aware that having multiple life insurance policies doesn't mean you can claim on all of them simultaneously, life insurance pays out once, and the insurers are aware of other policies in place. Income protection works differently and you can generally hold policies in and outside super, subject to the total benefit not exceeding your income.
Should I cancel my super insurance and switch to retail? +
Not without thinking it through carefully. If your health has changed since you first joined your fund, a new retail application involves new underwriting which may increase costs, offsetting any potential savings. For healthy people in their 40s or 50s the cost comparison often points toward retail, and it may be worth exploring. But it's best not to cancel one cover until you have the other in place.
Does my super cover amount stay fixed? +
Usually not. Most default super cover is unitised, the dollar amount of cover can fall from your mid-30s onwards, even as the premium rises. You could be paying more year on year for progressively less cover. Always check your current sum insured on your member statement, not just the premium.