Research commissioned by TAL found members who proactively adjusted their insurance cover were the most financially confident, with 77 per cent saying they felt adequately protected if illness or injury prevented them from working.
This compared with just 18 per cent of members who did not know whether they had insurance in super.
The study surveyed 2,000 Australians aged between 25 and 64 who were members of retail or industry super funds.
Among members with default cover, 64 per cent who knew their cover amount said they felt adequately protected, compared with 42 per cent who did not know how much insurance they held.
TAL general manager, group partnerships, Dan Taylor, said the findings highlighted the role super funds could play in improving member understanding of insurance in super.
“Our research shows that insurance isn’t only valuable for those who claim,” Taylor said.
“When members understand their cover and how it works, it gives them real peace of mind – and super funds are well placed to help them get there.
“More than eight in 10 members trust their fund to provide guidance on insurance and want to receive information on the topic regularly.”
The report found 55 per cent of members believed it was their fund’s responsibility to provide insurance guidance, while 80 per cent wanted to receive insurance-related communications from their super fund at least once a year.
TAL’s broader report said member engagement with insurance remained uneven across demographics, with younger Australians and women among the groups least likely to understand or review their cover.
According to the research, 74 per cent of members aged 25–34 who described themselves as uninsured did not realise they may already hold default insurance through super.
The report said younger members often viewed insurance as less relevant because they were more focused on housing affordability, education debt and broader cost-of-living pressures, despite their income representing their “most important financial resource”.
Taylor said rising financial pressures had increased the importance of insurance awareness.
“Many Australians are facing increased cost of living pressures. They’re conscious of their finances and to the protection they have – or don’t have. Super funds have a unique opportunity to meet members in that moment of heightened awareness and help them make sense of their cover.”
The report also identified a gender gap in insurance engagement, finding women were less likely than men to know their insurance status, adjust their cover or seek guidance.
Among women who described themselves as uninsured, 71 per cent had never looked into life insurance, compared with 59 per cent of men.
TAL said funds could improve engagement through more proactive communications tied to major life events, greater promotion of intra-fund advice services and expanded digital self-service tools.
“Every member’s circumstances are different. The opportunity for funds is to meet members where they are and make it easier for them to get protection that’s right for them,” Taylor said.
