By Tony Smilevski · Updated 11 October 2026
Key points
- AIA's PDS says the trustee owns the policy, so any insurance benefit you may be entitled to is paid to and held by the trustee for you, and the trustee can only pay it to you if the trust deed and super law allow.[1]
- Acenda's PDS says that if you don't meet a condition of release, the trustee can't release the benefit to you and holds it in the fund as a preserved benefit (kept in super) until you do.[2]
- ClearView's PDS says standalone cover is available inside super for Life Cover, TPD Cover (Any Occupation or Non-Occupational definitions) and Income Protection Cover, but not for Trauma Cover, TPD Cover with the Own Occupation TPD definition or Business Expense Cover.[3]
- AIA's PDS says you need enough money in your account in the fund to meet each premium, and if there isn't, the trustee can't pay it and your Superannuation Plan may be cancelled.[4]
- ClearView's PDS says there are restrictions on providing insurance to a person under age 25, with an account balance of less than $6,000, or whose account has been inactive for a continuous period of 16 months or more, and its application for cover inside super includes an election so that cover can be provided even if one of those applies.[5]
Life insurance in super is insurance held for you by your super fund's trustee (the company that runs the fund). The trustee owns the policy, the premiums are paid through super, and any benefit goes to the trustee first. It reaches you or your beneficiaries only if super law allows.
How does life insurance in super work?
AIA's product disclosure statement (PDS) says: "As the trustee is the owner of the Policy, any insurance benefit that you may be entitled to will be paid to and held by the trustee for you."[1] Acenda's PDS says it "issues the policy to the Trustee, who owns it on your behalf" and that you can "hold insurance and pay premiums through super".[6]
AIA's PDS says you need enough money in your account in the fund to meet each premium. If there isn't, the trustee can't pay it and your Superannuation Plan may be cancelled.[4]
For a benefit to reach you, two tests apply: the policy's own terms and a condition of release under super law (a set event that lets the trustee pay a benefit out).[6] AIA lists the conditions of release relevant to super insurance: death, a terminal medical condition, permanent incapacity, and temporary incapacity (income protection only).[7] Acenda's PDS says that if you don't meet a condition of release the trustee "can't release the benefit to you" and will hold it in the fund as a preserved benefit (kept in super) until you do.[2]
AIA's PDS says super law generally requires a death benefit to be paid to your dependants or your estate, and the fund's trust deed may restrict this further.[4]
Does my super have life insurance?
It might. Some super funds include insurance for members, and members can also buy cover through a fund. Your fund can confirm whether you hold cover through it, what type, and how the premiums are paid.
Super law limits when cover can be provided. ClearView's PDS says there are restrictions on providing insurance to a person under age 25, with an account balance of less than $6,000, or whose account has been inactive for a continuous period of 16 months or more. Its application for cover inside super includes an election so that cover you apply for can be provided even if one of those applies.[5] AIA's PDS says super law may require the trustee to cancel the policy if no contribution or rollover (a transfer from another super fund) is made to the account for 16 months, unless you have elected to keep the cover.[8]
Which covers can be held in super?
Life, TPD and income protection can be. Trauma generally can't, according to the PDSs below. Some insurers let trauma cover held outside super be linked to cover inside it (see linking below).[9][10]
- ClearView's PDS says standalone cover is available inside super for cover types including Life Cover, TPD Cover (Any Occupation or Non-Occupational definitions) and Income Protection Cover, but not for Trauma Cover, TPD Cover with Own Occupation TPD definition and Business Expense Cover.[3]
- PPS Mutual's super PDS lists life, TPD and income protection.[11] It also says trauma cover is not available through it.[12]
- OnePath's super PDS says Trauma Cover is not available through it.[13] Encompass's super PDS says Critical Illness Cover is not available through it.[14]
- Acenda's PDS lists stand-alone Life Cover and Income Protection as available inside and outside super, and lists stand-alone TPD and Critical Illness among the covers available outside super only.[15] Its PDS also lists TPD inside super as an Extension to Life Cover.[16]
See our trauma insurance guide and life insurance guide.
How does TPD insurance in super work?
Super law limits TPD definitions. OnePath's super PDS says TPD cover through super "cannot be based on your permanent incapacity to perform your own occupation only".[13] Encompass's and Futura's super PDSs say the same.[14][17]
The condition of release is permanent incapacity. Encompass's super PDS defines it as ill-health where the trustee is "reasonably satisfied that the member is unlikely, because of their ill-health, to engage in gainful employment for which the member is reasonably qualified by education, training or experience."[18] See our TPD insurance guide.
How does income protection through super work?
A claim must also meet the condition of release for temporary incapacity, which AIA lists as applying to income protection only.[7] Encompass's super PDS defines it as ill-health that caused you to stop being gainfully employed but isn't permanent incapacity, and says a benefit can't be paid for longer than the period of temporary incapacity.[18]
Encompass's super PDS says that if you are unemployed and become disabled, you may not be entitled to a benefit inside super, but its insurer offers separate Supplementary Income Protection Insurance outside super.[14] Our income protection guide has more.
What are super-linking, flexi-linking and split arrangements?
They are ways of holding some cover inside super and some outside it, under two policies.
- AIA: Superannuation PLUS and Maximiser. Superannuation PLUS offers benefits "generally not available through superannuation, such as Crisis Recovery and TPD (Own Occupation) cover". It can be bought outside super if the trustee has bought a Superannuation Life Cover Plan for you.[19] Maximiser splits TPD across two policies. The "any occupation" policy is assessed first, and only if that definition isn't met is the "own occupation" policy assessed.[20] A Superannuation PLUS claim is paid to you, not the trustee, and reduces the Life Cover or TPD sum insured inside super by the same amount (Double benefits are an exception).[21] Premiums for the linked benefits are paid directly to AIA, not from your fund account,[4] and if the super cover ends, the linked cover ends too.[1][21]
- ClearView: flexi-linking and TPD Super Solutions. Flexi-linking issues two policies that operate similarly to linked cover, and a payout reduces all flexi-linked cover by the amount paid.[10] Under TPD Super Solutions, Any Occupation TPD sits inside super and Own Occupation TPD outside. A claim is assessed first under the super policy and, if that definition isn't met, under the outside policy. A benefit can only be paid under one policy. If the super policy is cancelled, the outside policy must be cancelled too, but ClearView says it will offer the latest standalone cover outside super without additional underwriting, provided the cover is on a like-for-like basis.[22]
- OnePath OneCare: SuperLink. Life Cover held through super is linked to TPD Cover held outside, and a TPD benefit paid outside super reduces the Life Cover insured amount.[9][23] Under its SuperLink TPD arrangement (TPD inside super linked to TPD outside), the super policy is assessed first, and if the outside policy is cancelled because its premium is overdue, the super cover ends too.[23]
- PPS Mutual: Split TPD and Split IP.[12] On a claim you are assessed under the super plan first, and if you satisfy its conditions the benefit is paid to the trustee. PPS Mutual also assesses you under the non-super plan and pays any additional amount payable.[24]
- Acenda: Extensions, Connections and TPD Optimiser. TPD or Critical Illness can be attached to Life Cover on a separate policy with a different owner, letting you connect insurance held inside and outside super.[15] Its TPD Optimiser packages Any Occupation TPD inside super with Own Occupation TPD outside.[16]
How the insurers compare
- Insurer and arrangement: AIA: Maximiser (TPD split across two policies) — What its PDS says: The "any occupation" policy is assessed first; the "own occupation" policy is assessed only if that definition isn't met.[20]
- Insurer and arrangement: AIA: Superannuation PLUS — What its PDS says: Adds benefits "generally not available through superannuation" outside super; a claim is paid to you and reduces the super sum insured (see What are super-linking, flexi-linking and split arrangements?).[19][21]
- Insurer and arrangement: ClearView: flexi-linking — What its PDS says: Two policies operate similarly to linked cover (only two can be connected), and a payout reduces all flexi-linked cover by the amount paid.[10]
- Insurer and arrangement: ClearView: TPD Super Solutions — What its PDS says: Any Occupation TPD inside super, Own Occupation outside; super policy assessed first, benefit paid under one policy only (cancellation rules: see What are super-linking, flexi-linking and split arrangements?).[22]
- Insurer and arrangement: OnePath: SuperLink (OneCare) — What its PDS says: Life Cover in super linked to TPD Cover outside, and a TPD benefit paid outside reduces Life Cover; for SuperLink TPD the super policy is assessed first.[9][23]
- Insurer and arrangement: PPS Mutual: Split TPD and Split IP — What its PDS says: Assessed under the super plan first, benefit paid to the trustee if conditions are met; also assessed under the non-super plan, any additional amount paid.[12][24]
- Insurer and arrangement: Acenda: Extensions, Connections and TPD Optimiser — What its PDS says: TPD or Critical Illness on a separate policy can connect cover inside and outside super;[15] TPD Optimiser pairs Any Occupation inside super with Own Occupation outside.[16]
What is a risk-only super product?
Some insurers issue a PDS for a risk-only super product, which holds insurance and no savings:
- PPS Mutual's super PDS says the product "does not provide accumulation style superannuation account balances", and that premiums must be paid by rollover from another super fund.[25][26]
- OnePath's super PDS says the account "does not have an account balance", and premiums are paid by contributions or by rollover.[27][28]
- Encompass's super PDS says it doesn't accept contributions, only rollovers to pay premiums.[29]
What happens if I stop contributing or change funds?
PDS examples, plus the inactivity rule above:
- AIA: cover ends at the earliest of several events, including an account with insufficient money to pay the premium, and ceasing to be a member of the fund.[8]
AIA's PDS says certain Superannuation Life Cover Plan benefits (Life Cover, TPD and TPD Buy Back, before their expiry dates) can be replaced with ordinary plan benefits, for the same or a lower sum insured, without medical evidence, if AIA offers them then. You pay premiums directly.[30] OneCare's PDS says it may offer to cancel and replace the policy. That needs a new application, keeps the same loadings, exclusions and special terms, and uses the cover options and premium rates of the day. It may decline if you have made or can make a claim.[31]
How is life insurance in super taxed?
Tax depends on your circumstances. The ATO says: "To withdraw money from super you need to have satisfied a condition of release." It says tax on a super death benefit depends on factors including whether you were a dependant of the deceased, and that a dependant doesn't "need to pay tax on the taxable component of a death benefit if you receive it as a lump sum". Other recipients can pay tax on it.[32] For disability super benefits, it says: "We tax lump sums and income stream payments differently."[33]
AIA's PDS says: "Depending on your tax circumstances, the benefit may be subject to more tax than would otherwise apply if the benefit was paid from the same insurance held outside of superannuation."[8] The same PDS says lump sums paid from super to a person with a terminal medical condition are tax-free, and so are lump sum death benefits paid to a tax dependant (a dependant for super purposes may not be a tax dependant).[30] A registered tax agent or accountant can say how tax applies to you. See our tax deductibility guide.
Should I have life insurance through super or not?
We can't tell you whether to hold cover through super. That depends on your own circumstances, and this page doesn't take them into account. The trade-offs, in general terms:
Points people weigh in favour
- Premiums come from super rather than cash flow. PPS Mutual's super PDS says its split structure may allow "a significant portion of your premium" to be paid using super money.[24]
- Encompass's super PDS says the trustee can generally claim a tax deduction for premiums and usually passes it on as a reduced premium, though it may reduce or stop this.[14][29]
- AIA's PDS says Superannuation PLUS provides cover inside and outside super at a cheaper premium than holding it on two stand-alone policies.[20]
- Linked structures can add definitions or features available only outside super.[19]
Points people weigh against
- Less retirement savings. Encompass's super PDS says premiums "will reduce your retirement savings so that you may have less available to you on retirement".[34]
- Contribution limits, possible extra tax, premium refunds that stay in super, and law changes.[8]
- Cover can end if the account is short of money, inactive or you leave the fund (see above).
- Fewer features. The PDSs above say trauma and Own Occupation TPD aren't available inside super.
Questions to ask before you choose
- Which covers and definitions apply inside super, and what is only available outside it?
- How are premiums paid, and what happens if the account is short, inactive or closed?
- Which condition of release applies to each claim, and what happens if I don't meet it?
- Who receives a death benefit, and can I make a binding nomination?
- If cover is split or linked, how are claims assessed, and what happens if one policy ends?
Read the insurer's PDS and TMD before deciding, along with your fund's own PDS. Find the insurer's in our PDS and TMD library. We deal with 11 Australian life insurers. For general information about anything in this guide, book a time with Tony or call 0433 22 77 11.
Sources
- [1] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 150.
- [2] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 60.
- [3] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 24.
- [4] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 151.
- [5] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 29.
- [6] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 19.
- [7] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 152.
- [8] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 156.
- [9] OnePath OneCare PDS (Mar 2026), PDF page 8.
- [10] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 25.
- [11] PPS Mutual Super Fund PDS (Dec 2024), PDF page 5.
- [12] PPS Mutual Super Fund PDS (Dec 2024), PDF page 6.
- [13] OnePath OneCare Super PDS (Brighter Super) (Oct 2025), PDF page 5.
- [14] Encompass Protection Super PDS (Sep 2025), PDF page 7.
- [15] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 64.
- [16] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 30.
- [17] Futura Protect Super Plan PDS (Oct 2025), PDF page 7.
- [18] Encompass Protection Super PDS (Sep 2025), PDF page 11.
- [19] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 157.
- [20] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 12.
- [21] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 158.
- [22] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 45.
- [23] OnePath OneCare PDS (Mar 2026), PDF page 33.
- [24] PPS Mutual Super Fund PDS (Dec 2024), PDF page 9.
- [25] PPS Mutual Super Fund PDS (Dec 2024), PDF page 4.
- [26] PPS Mutual Super Fund PDS (Dec 2024), PDF page 7.
- [27] OnePath OneCare Super PDS (Brighter Super) (Oct 2025), PDF page 4.
- [28] OnePath OneCare Super PDS (Brighter Super) (Oct 2025), PDF page 6.
- [29] Encompass Protection Super PDS (Sep 2025), PDF page 9.
- [30] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 154.
- [31] OnePath OneCare PDS (Mar 2026), PDF page 116.
- [32] Australian Taxation Office, Tax on super benefits (retrieved 30 September 2026).
- [33] Australian Taxation Office, Invalidity or disability payments from employers or super funds (retrieved 30 September 2026).
- [34] Encompass Protection Super PDS (Sep 2025), PDF page 14.
Just so you know, Tony Insurance operates under Sustainable Life Solutions (AFSL 536966) and can only give general advice about life insurance. That means we'll tell you what you need to know for you to make a good decision, but we can't give you specific advice or recommendations. It also means that everything on our website is only general information and isn't specific to you.
Toni Smilevski, Authorised Representative 343156 of Sustainable Life Solutions Pty Ltd (AFSL 536966)