AustralianSuper Announces Significant Insurance Premium Hikes

The fund, managing approximately $410 billion in assets, will implement the following average annual premium increases:

• Total and Permanent Disability (TPD) cover: approximately 40%
• Death cover: around 20%
• Two-year income protection: close to 38%

For instance, a 45-year-old in a white-collar role will see their basic cover cost rise to about $236 per year, while their blue-collar counterpart will pay approximately $526.

These adjustments affect roughly 1.7 million of AustralianSuper's 3.6 million members who hold insurance through the fund. The surge in claims, particularly from younger individuals unable to return to work due to mental health conditions, has been a significant factor in this decision. Industry data indicates that mental health-related TPD claims have doubled in value from about $1.2 billion in 2019 to $2.4 billion in 2024, now constituting roughly one in three such claims.

Other super funds are also adjusting their premiums. CareSuper, for example, has informed members of rate increases closer to 10%, marking the first rise in three years.

While group life cover through superannuation remains generally more affordable than retail policies obtained through advisers, these premium hikes highlight the ongoing challenge of balancing comprehensive protection with affordability. As claims trends continue to evolve, super funds, regulators, and insurers will need to navigate the delicate trade-off between maintaining sustainable insurance offerings and ensuring accessible coverage for members.