5,000 Australians a Year Now Die Without Life Insurance: What the Super Reforms Did

Written by Christopher Hall, AdvDipFP | Authorised Representative, AFSL 526688 | July 2026

Since the 2019 superannuation reforms — Protecting Your Super and Putting Members' Interests First — default life and TPD cover has been switched off for large numbers of Australians, and the cost is now measurable. ASFA research finds that around 5,000 Australians a year die without life insurance as a result, with families collectively missing about $670 million in death benefits annually, while roughly 11,000 people a year miss out on around $1.5 billion in TPD benefits (ASFA, 2026). From more than 500 policy reviews, Christopher Hall, AdvDipFP, Authorised Representative, AFSL 526688, sees the individual version of that statistic constantly: about 1 in 3 clients on default super-only cover have protection that has quietly fallen below an adequate level.

This article is general information, not personal advice. It explains what the reforms changed, how much cover was lost, why it happens without anyone noticing, and what to check on your own super.

What did Protecting Your Super change?

Protecting Your Super (from 1 July 2019) was designed to stop small and inactive super balances being eroded by fees and insurance premiums. Its most consequential insurance rule: a fund must cancel insurance on any account that has been inactive — no contributions or rollovers — for 16 months, unless the member elects to keep it (APRA). The intent was sound: stop people paying for duplicate or unwanted cover across multiple accounts. The side effect was that people who changed jobs, took parental leave, or ran a second (older) account often lost cover they did not know they still had.

For the reason default cover erodes even on active accounts — separate from cancellation — see why your super fund's cover may be less than you think.

What did Putting Members' Interests First change?

Putting Members' Interests First (from 1 April 2020) went further, stopping funds from providing insurance on an opt-out basis to new members under 25, and to anyone with a balance under $6,000 — those members now have to opt in (APRA). Again the aim was to protect young and small balances from premium erosion. The consequence is that a large cohort of younger and lower-balance Australians now have no default cover at all unless they actively ask for it. And because the rule has now run for more than six years, that cohort has matured: someone who was 25 when it began is around 31 today, so the group with no default cover stretches from current under-25s up to Australians in their early thirties — the audience examined in under 25 or a low balance, why you likely have no default insurance.

How much cover did Australians lose — and what has it cost?

A lot, and the human cost is now quantified. Independent actuarial analysis found that group insurance inside super fell by about 27% for death cover and 29% for TPD cover after the reforms (Rice Warner). ASFA's research translates that into outcomes: about 5,000 deaths a year with no cover, roughly $670 million in foregone death benefits, and around 11,000 people a year missing about $1.5 billion in TPD benefits (ASFA, 2026). The government also wears part of the cost — actuarial estimates put the social-security cost of death and TPD underinsurance at well over $600 million a year (Rice Warner).

Importantly, this is a coverage problem, not a claims-payment problem. For Australians who do still hold cover in super, the value is strong: across group TPD and disability-income cover, insurers pay out more in claims than they collect in premiums — a claims-to-premium ratio above 100% (ASFA, 2026). A ratio above 100% simply means more money flowed back to members as claims than was received in premiums; it is a different measure from the claim admittance rate, which is the share of lodged claims accepted and sits in the mid-to-high 90 per cent range and cannot exceed 100%. The system pays generously when you are covered; the reforms simply left far more people uncovered.

The bill is also likely to grow rather than hold steady. The group left without default cover is not static — each year more of the working population passes through the under-25 and low-balance rules, while those already caught by them keep ageing. Because the likelihood of a death or disability claim rises steadily with age, a widening pool of uncovered Australians moving into their higher-risk years means the foregone-benefit figures above should be read as an early estimate of a growing gap, not a ceiling. In Christopher Hall's view, this is the part most people underestimate: the cost compounds quietly as the affected cohort gets older.

Why does cover get switched off silently?

Because most of the triggers are invisible in day-to-day life. An account tips into "inactive" after 16 months without a contribution — common when someone changes employers or consolidates the wrong way. A young worker never has cover switched on in the first place. A balance sits under $6,000. None of these arrive as an alarming letter; cover simply isn't there when a claim would have been made.

Christopher Hall sees the end result at review: "The most confronting cases are the ones who believed they were covered — I've sat with a client who thought they held $500,000 of TPD, and the actual default cover at review was $36,000." (C. Hall, Arrow Equities, client case, 2024). His reviews also show that clients who have actively checked their super within the last four years are far less likely to have suffered a severe collapse — the problem is inertia, not usually a single bad decision.

What has ASFA said should change?

ASFA's position is that the original intent — stopping balance erosion — was reasonable, but the mechanism was too blunt and the settings should be revisited so that cover reaches the people who need it without unnecessarily stripping it from others (ASFA, 2026). That is an industry-body policy view, not a change in the current law: as things stand, the 16-month inactivity rule and the under-25 / under-$6,000 opt-in rules still apply. Developments like this are tracked in our Australian life insurance industry news hub.

What should you check on your super insurance now?

Four quick checks catch most of the damage: whether you still have cover at all (log in or read your latest statement); whether any old or inactive account has had its cover cancelled; the dollar amount of any death and TPD cover (not just "units"); and whether that amount would actually clear your mortgage and support your family. If you hold more than one fund, also check you are not paying for duplicate cover across accounts.

Because whether your cover is adequate — and whether it should sit inside super, personally, or both — depends on your circumstances, this is general information, not personal advice. The reliable way to find out is to have it reviewed by a licensed adviser; you can book a quick review with an adviser here. A structured insurance premium and policy review checks all four points and compares cover across a panel of leading Australian insurers including Zurich, ClearView and Encompass, among others — which is often how a gap left by the Protecting Your Super changes is found before it matters.

Frequently asked questions

What is Protecting Your Super?

Protecting Your Super is a 2019 reform package designed to stop small and inactive super balances being eroded by fees and insurance premiums. Its key insurance measure requires funds to cancel insurance on accounts that have been inactive for 16 months unless the member elects to keep it. It aimed to remove duplicate and unwanted cover, but also caused some members to lose cover they still needed.

Why did my super insurance get cancelled?

The most common reason is inactivity: under Protecting Your Super, a fund must cancel insurance on an account with no contributions or rollovers for 16 months unless you opt to keep it. Changing jobs, taking leave, or holding an older second account can all trigger it. Cover can also never have started if you were under 25 or under the $6,000 balance threshold.

How many Australians lost insurance in super?

ASFA research attributes about 5,000 deaths a year with no life cover and roughly 11,000 people a year missing TPD benefits to the 2019 reforms, with families missing about $670 million in death benefits and around $1.5 billion in TPD benefits annually (ASFA, 2026). Actuarial analysis found group cover in super fell about 27% for death and 29% for TPD (Rice Warner).

Does an inactive super account lose insurance?

Yes. Under Protecting Your Super, insurance on an account inactive for 16 months (no contributions or rollovers) is cancelled unless the member elects to keep it. This is one of the most common ways Australians lose cover without realising, particularly on older accounts left behind after changing jobs.

What is the 16-month inactivity rule?

It is the Protecting Your Super rule that requires a super fund to cancel a member's insurance once their account has received no contributions or rollovers for 16 continuous months, unless the member has elected to keep the cover. It was intended to stop inactive accounts being drained by premiums.

How do I get my super insurance back if it was cancelled?

You generally contact your fund and request to reinstate or apply for cover, but it is not always automatic — reinstating or taking new cover can require health information and underwriting, which may result in exclusions, loadings or a decline if your health has changed. Because of that, it is worth checking your position before assuming cover can simply be switched back on.

What has ASFA said about the reforms?

ASFA has said the original goal of protecting balances was reasonable, but the mechanism was too blunt, and it has called for the settings to be revisited so cover reaches those who need it (ASFA, 2026). This is an industry-body policy position, not a change to the current law, which still applies.

Are the super insurance reforms being reversed?

Not at this stage. Industry bodies including ASFA have argued the settings should be reconsidered, but the Protecting Your Super inactivity rule and the under-25 and under-$6,000 opt-in rules remain in force. Any change would require new legislation, so members should manage their cover under the current rules.

Are TPD and life claims actually paid in super?

Yes. For members who hold cover, claims are paid at high rates — ASFA reports group TPD and disability-income claims-to-premium ratios above 100% and claim admittance in the mid-to-high 90 per cent range (ASFA, 2026). The issue created by the reforms is that far fewer people hold cover, not that valid claims go unpaid.

What does a claims-paid ratio above 100% mean?

It means insurers paid out more in claims than they collected in premiums for that type of cover — a sign of strong value for members, not an error. It is different from the claim admittance rate, which is the percentage of lodged claims that are accepted; that figure cannot exceed 100% and sits in the mid-to-high 90s for group cover in super (ASFA, 2026).

How do I check if I still have cover in my super?

Log in to your fund or read your most recent annual statement and look for a current insurance section showing the type of cover (life, TPD, income protection) and the dollar sum insured. Check any old or inactive accounts too, since those are the most likely to have been cancelled. If anything is unclear, a policy review can confirm exactly what you hold.

Book a quick review with an adviser

Book a quick review with an adviser now. A review checks whether your super still holds life and TPD cover, whether an old account was cancelled, and whether the amount would actually protect your family. This is general information, not personal advice.

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About the author

Christopher Hall, AdvDipFP, is the principal financial adviser at Arrow Equities and an Authorised Representative under AFSL 526688. He has completed more than 500 life insurance policy reviews for Australian families, with a specialisation in life risk insurance.

Sources

#	Source	Type	Year
1	Association of Superannuation Funds of Australia (ASFA) — research/media release on insurance through superannuation: ~5,000 deaths/yr uninsured, ~$670m death benefits and ~$1.5bn TPD benefits foregone, ~11,000 missing TPD/yr, group claims-paid ratios above 100% — superannuation.asn.au	Industry body	2026
2	Rice Warner — analysis of group insurance in superannuation: ~27% (death) and ~29% (TPD) fall in cover since June 2018; government underinsurance cost well over $600m/yr — ricewarner.com	Research house	2020
3	Australian Prudential Regulation Authority (APRA) — Protecting Your Super (16-month inactivity cancellation) and Putting Members' Interests First (under-25 / under-$6,000 opt-in) — apra.gov.au	Government / regulator	2020
4	Christopher Hall, Arrow Equities — observations from 500+ life insurance policy reviews ($500k→$36k default-cover case; 1-in-3 default collapse; four-year recency exception)	CH dataset	2026

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