If Your Super Account Went Quiet, Your Insurance May Have Switched Off: What the Super Industry's Own Research Found

About 5 million super accounts lost their insurance cover after the 2019 reforms, according to research from the Association of Superannuation Funds of Australia (ASFA). Many of the people affected never knew it happened.

The research was launched at ASFA's Spotlight on Insurance forum, held at the Sheraton Grand Sydney Hyde Park on 5 March 2026, and is published as ASFA's research paper Insurance provided through superannuation (February 2026). It puts numbers to something we hear about often: people who assume they have no insurance, when in fact their cover was quietly switched off.

This is a news report. It was originally published on 15 June 2026 and covers research presented on 5 March 2026.

The key numbers

According to the ASFA research:

• Around 5 million super accounts lost insurance cover as a result of the reforms.
• An estimated 5,000 Australians a year have died without the life insurance they might otherwise have held through super. ASFA puts that at roughly $670 million in death benefits each year not reaching families.
• Around 11,000 people a year are estimated to be missing out on total and permanent disability (TPD) benefits, worth about $1.5 billion a year.

Source: ASFA, Insurance provided through superannuation (February 2026), launched at the Spotlight on Insurance forum, Sydney, 5 March 2026.

For context, ASFA notes that around 9.3 million Australians hold death cover through super and 8.2 million hold TPD cover, while roughly 12 million people received employer super contributions as at June 2025. The gap between those figures is where the missing cover sits.

What changed in 2019

Two reforms changed how insurance works inside superannuation (super).

The Protecting Your Super (PYS) package required funds to cancel insurance on accounts that had been inactive for 16 months or more. Inactive means no contribution received in that time. Moneysmart, the consumer site of the Australian Securities and Investments Commission (ASIC), puts it plainly: by law, super funds cancel insurance on accounts with no contributions for at least 16 months. A member can keep the cover by telling the fund, or by putting money into the account.

The Putting Members' Interests First (PMIF) Act then removed automatic default insurance for members under 25 and for accounts with a balance below $6,000. Per Moneysmart, cover does not start automatically for a new member under 25, or where the balance is under $6,000, unless the member contacts the fund and asks for it.

The intent was reasonable. Premiums on forgotten and duplicate accounts were quietly eroding retirement savings. But ASFA's research suggests the change went further than many people understood.

"The mechanism was too blunt"

ASFA's position is not that the reforms were the wrong idea. It is that cover was removed indiscriminately. James Koval, ASFA's Chief Policy and Advocacy Officer, said "the mechanism was too blunt", and that "insurance was switched off by default, often leaving people unaware it had happened".

That last part is what matters day to day. Many people never received, or never absorbed, the message that their cover had ended. They found out when they, or their family, went to make a claim.

Who was most affected

The research points to the groups most likely to have lost cover, or never had it switched on:

• workers under 25
• people with balances under the $6,000 threshold
• self-employed people whose accounts became inactive
• anyone who changed jobs often, took career breaks, or held more than one account

Those are the accounts most likely to tip into inactive status and have insurance cancelled.

Why this matters if you have stopped work

Here is the part the headlines tend to miss. The inactivity rule catches people at exactly the wrong moment.

If you stopped working because of illness or injury, your employer contributions stopped too. Sixteen months on, an account that still held cover can have that cover cancelled. The people most likely to need TPD or income protection cover are the same people whose accounts go quiet.

Two things are worth knowing here, as general information rather than advice on any particular policy:

• What usually matters for a TPD claim is whether cover was active when you stopped work, or when you met the policy's definition, not whether it is active today. Cover that lapsed later does not automatically rule out a claim for something that happened while it was in force. It depends on the policy.
• Old and lost super accounts can still hold, or have held, cover. An account you stopped paying into years ago may still be relevant.

The useful step is to check rather than assume. Most people can see their cover through their fund's member portal or by calling the fund, and lost super can be found through the Australian Taxation Office (ATO) via myGov.

What ASFA wants changed

To close the gap, ASFA has put forward several policy changes, including:

• extending opt-out insurance to members aged 21 and over, rather than 25
• applying default cover to new full-time employees from their first day of work
• replacing automatic cancellation with a stronger opt-out process that requires an active, informed decision from the member before cover ends

One more finding worth noting: where cover does exist, it is generally paying. ASFA reports claim admittance rates for this cover in the mid to high 90 per cent range. ASFA also reports group TPD and disability income claims paid ratios above 100 per cent, though the Australian Prudential Regulation Authority (APRA) cautions that a claims paid ratio on its own is not a measure of consumer value. The problem the research describes is people not having cover, not insurers refusing to pay.

Where this leaves you

Policy change takes years. Checking your own cover does not have to wait. If you stopped working because of illness or injury, or you are not sure whether your super still includes insurance, the practical questions are:

• whether you have, or had, life, TPD, or income protection cover in any super account
• whether that cover was active when you stopped work or became unwell
• whether old or lost super accounts may have held cover
• what definitions and exclusions apply under each policy

If you want to talk any of this through, we'll explain which doors exist for your situation and, if you want, introduce you to a firm on our panel. It costs you nothing.