Family Cover Costs Four Weeks' Pay a Year. Super's Average Death Claim Covers 16 Months

Four weeks' pay to cover a family

Three policies do most of the work of protecting a household's income. Life cover pays a lump sum on death, total and permanent disability (TPD) cover pays a lump sum if you can never work again, and income protection pays a monthly benefit while illness or injury keeps you off work. On Going Rate's typical prices, life insurance ($3,150) costs about a week and a half of the average full-time wage, income protection ($3,400) a little more than that, and TPD insurance ($1,900) a little under a week.

Together the three cost about four weeks of the average full-time wage, which the ABS put at $2,083.70 a week in May 2026. That is roughly one week's pay in every thirteen.

These are typical prices. Premiums swing heavily with age, health, smoking, occupation and the amount of cover, so a young office worker who doesn't smoke can pay well under the typical price, and an older smoker in a manual job well over it. A quote will differ.

Super charges a fraction of the retail price

Almost 90% of Australians with TPD cover held it through super in 2018, ASIC reported in 2019. The fund buys a group policy and deducts the premium from the member's balance. Set APRA's annual group premiums against its count of lives insured at December 2025 and each cover in super works out to a few hundred dollars a year per member. On that rough basis, Going Rate's typical retail life premium ($3,150), retail TPD premium ($1,900) and retail income protection premium ($3,400) each cost several times the super equivalent.

That comparison is approximate. Insurers report lives insured to APRA separately, so a person with cover in two funds can be counted twice, which pulls the per-member figure down. A published benchmark points the same way. The Productivity Commission's 2019 superannuation report put the average premium for automatic default cover at about $300 a year, and Going Rate's typical life premium ($3,150) alone is more than ten times that.

Default cover also has gaps by design. Since 1 April 2020, new members under 25 and members with balances under $6,000 get no default cover unless they opt in, the Council of Australian Life Insurers notes, and by law funds cancel cover on accounts with no contributions for 16 months, Moneysmart says. The Productivity Commission found only 29% of MySuper accounts included income protection.

What the payout buys

The price gap tracks a payout gap. APRA's 2025 claims statistics show the average admitted death claim was $143,125 in group super, $261,719 on cover bought direct and $566,610 on cover arranged through an adviser. Against the ABS average full-time wage, the super payout replaces about 16 months of earnings and the advised payout a little over five years.

TPD shows the same pattern more sharply. The average admitted TPD claim in group super was $143,731 in 2025, against $784,723 on advised retail cover, so default cover paid about a fifth as much. For someone who will never work again, the super payout covers less than a year and a half of the average full-time wage.

Rice Warner's 2020 underinsurance study found the insurance Australians held covered 92% of basic death needs but only 29% of basic TPD needs. The disability gap is the wider one, and it is the cover where the super payout falls furthest behind retail.

Cheap TPD cover is the least likely to be declined

The default cover in super pays out more often. APRA's 2025 data shows group-super TPD claims were admitted 90% of the time, against 82% for advised retail TPD and 69% for TPD bought direct. Insurers declined 2,213 of 22,623 finalised group-super TPD claims in 2025, or 9.8%, and 343 of 1,941 advised claims, or 17.7%. Direct TPD had only 80 finalised claims, a small sample.

TPD claims are also slow. APRA estimates the average TPD claim took 3.8 months to process in 2025, against 1.0 month for a death claim, and 4.4% of TPD claims took more than a year. At the end of 2025 about a fifth of the group-super TPD claims APRA counted for the year were still undetermined, and 37% of advised TPD claims.

The definition in the policy matters as much as the channel. In 2019 ASIC reported that insurers declined 60% of TPD claims assessed under the "activities of daily living" test, which pays only if you can't do things such as wash, dress and feed yourself, against 12% for other TPD claims. Anyone checking their super cover should read which TPD definition applies to them.

Income protection costs the most and draws the most fights

Retail income protection became expensive after insurers lost money on it. APRA says insurers lost $3.4 billion on individual income protection over five years, and it then imposed design limits. Policies sold from 1 July 2021 replace at most 75% of earnings after the first six months. On the average full-time wage, Going Rate's typical income protection premium ($3,400) equals a little over two weeks of that benefit.

APRA's own figures show the average income protection premium rose from $2,500 in June 2018 to $4,000 in June 2022, and Going Rate's typical figure sits below that 2022 average. Cover also falls away. APRA's data shows 12.7% of advised income protection policies lapsed in 2025.

Claims are fought over more than any other cover. In 2025 APRA recorded 446 income protection disputes per 100,000 lives insured on policies bought direct and 315 on advised policies, against 74 in group super. AFCA received 530 income protection complaints in 2024-25, the most of any life insurance product, CHOICE reports. Insurers reported 1,663 breaches of the Life Insurance Code of Practice's rules on paying income protection on time in 2024-25, up 67% on the year before.

Families without enough cover

About 1 in 3 working Australians have no life cover at all, and 60% of the uninsured cite cost, the Council of Australian Life Insurers (CALI) found in its 2025 safety net report. NMG Consulting estimated in 2022 that 3.4 million Australians were underinsured for basic income protection needs, CALI reports.

The shortfall shows up when people claim. Deloitte estimated in 2023 that Australian families could have claimed $25 billion more in a single year if they had held adequate cover. The 2021 Census counted 2,550,284 families with children under 15, the households most exposed if one income stops.

Most families need to know how much cover super already provides and how much more the household would need if one income stopped for good. A fund's insurance statement shows the death and TPD sums insured. A retail policy would fill the gap between those sums and the mortgage plus several years of earnings.

Default cover still has a cost

Cheap cover in super is paid from retirement savings. The Productivity Commission found lifetime insurance premiums could cut the retirement balance of a low-income or multiple-account member by 14%, or $85,000. In 2016-17, $1.9 billion of premiums went on unintended duplicate policies, it found.

Retail cover has its own leak. APRA's data shows 16.2% of advised retail death policies lapsed in 2025. A replacement policy is priced on your age and health at the time you apply.

Going Rate's typical prices give a starting point for sizing the extra cover. A quote depends on age, health, smoking, occupation and the sum insured, and an adviser can check whether the policy in super already covers part of the need.

Common questions