Most people have life insurance or total and permanent disability cover sitting inside their superannuation fund without realising it. A terminal diagnosis can unlock a lump sum payment while there is still time to use it. This guide explains what to look for, who to contact, and how to make a claim.
Most Australians have life insurance and they don't know it.
If you or the person you're caring for has ever had a job in Australia, there may be a superannuation fund somewhere with life insurance and possibly total and permanent disability (TPD) cover attached to it, and it can be worth a significant amount.
A terminal diagnosis changes what that cover means. You may be able to claim on it now, while you still have time to decide how the money is used.
This guide explains how to find out what cover exists, what types of claims may be available, and how to get help making a claim.
What types of insurance might be inside my superannuation?
Super funds typically offer three types of insurance to members:
Life insurance (also called death cover) pays a lump sum to your beneficiaries after you die. Most funds provide this by default once you are 25 and have at least $6,000 in the account.
Total and permanent disability (TPD) cover pays a lump sum if you become permanently unable to work. The definition of "permanent" varies between funds, so it's worth checking the exact wording.
Income protection insurance pays a percentage of your income if you're unable to work due to illness or injury. This is usually temporary, not a lump sum.
With a terminal diagnosis, the terminal illness benefit attached to death cover is often the most relevant, because it can be paid while the person is alive. TPD may also apply if they can no longer work.
How do I find out what insurance cover I have?
Start by locating all superannuation accounts. Many people have more than one fund, especially if they've changed jobs over the years.
The ATO's myGov portal (ato.gov.au) is the easiest place to find all superannuation accounts linked to your tax file number. Log in at my.gov.au, link the ATO service, and look under "Super".
Once you've identified the funds, contact each one and ask specifically:
- Do I have life insurance on this account?
- Do I have TPD cover on this account?
- What is the current insured amount?
- What is the definition of TPD used in the policy?
- What is the claims process for a terminal illness?
Some funds have an online dashboard that shows cover details. Others require a phone call or letter.
Is there a terminal illness claim I can make while still alive?
Many super funds and life insurers have a specific terminal illness benefit that sits alongside standard TPD and life cover. This allows a lump sum to be paid to the person with the diagnosis while they are still alive, rather than to their beneficiaries after death.
To be eligible, the insurer usually needs medical certification, often including a specialist's, that the person is likely to die within 12 or 24 months. Both the certification and the timeframe are set by the policy, so check its wording.
This is worth pursuing even if the insured person has not stopped working. What matters is the medical certification the policy asks for.
What about life insurance policies held outside superannuation?
If you or the person you're caring for has ever taken out standalone life insurance, income protection, or trauma cover outside of super, those policies may also be relevant now.
Look for:
- Insurance documents in email, paper files, or stored with a financial adviser
- Policies taken out when purchasing a home or car
- Cover offered through a professional association or employer that's separate from super
Contact the insurer directly and ask about terminal illness or TPD claims. If you can't find policy documents, check your bank statements for regular premium payments. The payment description usually includes the insurer's name.
Where do I get help making a claim?
Insurance claims can be complex, and funds and insurers don't always make the process simple. There are people who can help.
Your super fund's member services team can walk you through the claims process step by step. Ask who your claims contact will be.
A financial adviser with experience in insurance claims can help you understand the options and what the money means for your situation.
The Australian Financial Complaints Authority (AFCA) handles disputes with insurers and super funds if a claim is denied. If you believe a claim has been wrongly rejected, AFCA is the place to go.
Community legal centres can also help. Some offer free advice on insurance claims.
Why do I need to act sooner rather than later?
There are two reasons, and the second one catches people badly.
The first is that a terminal illness claim is made while the person is alive. Ask the insurer what happens to a claim that is still open if they die.
The second is that insurance inside super is cancelled automatically if the account stops receiving money. By law, a fund must switch off the insurance once an account has gone 16 continuous months without a contribution or a rollover, unless the member has told the fund they want to keep it.
Read that again with a terminal diagnosis in mind. A person stops working. Contributions stop with the job. Sixteen months later the death cover and TPD cover are cancelled, quietly and lawfully, and the family finds out only when they claim. The cover was paid for across an entire working life and is gone at exactly the point it was for.
The fund is required to write to you at 9, 12 and 15 months of inactivity, so there are warnings. They arrive as super mail, during the hardest year of your life, and they are very easy to miss.
Keeping the cover is straightforward. You tell the fund in writing that you want to keep it, and that election holds until you withdraw it. Adding money to the account also restarts the clock. Either way, it is a short step, not a long process.
This is also why an old super account that seems to have no insurance may simply have had it cancelled already. Ask the fund what cover the account used to carry, not just what it carries now.
Acting early gives you the best chance of making a successful claim and having time to decide how the funds are used.
If you're not sure where to start, call the super fund first. Even a ten-minute conversation can tell you whether there's a claim worth pursuing.
What should I ask when I call the super fund?
- Confirmation of all insurance cover on the account
- Whether that cover is at risk of being cancelled for inactivity, when the 16 months would fall, and how to elect in writing to keep it
- What cover the account used to carry, if it carries none now
- The product disclosure statement for the insurance (in plain language if possible)
- The definition of TPD used in the policy
- The definition of terminal illness used in the policy
- The claims forms and what medical evidence is required
- Whether a financial adviser or claims manager can assist
Platform tools
- Your checklistEvery task across all five stages of the journey, gathered in one place so nothing is forgotten.
- Document vaultStore the will, power of attorney, advance care directive, and other important documents securely in your account. Available to members.
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Pierre started 18December after his partner Mark was given a terminal diagnosis, when they mapped out everything that needed to happen at the kitchen table. He reviews the guides to keep them honest, plain, and genuinely useful. About 18December
Last reviewed 10 October 2026
Read the latest version of this guide at www.18december.com.au/guides/life-insurance-and-super-cover-review
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