Group insurance premiums paid by super funds up 7%

Group insurance premiums paid through APRA-regulated superannuation funds rose by 7% in 2023-24, taking total premiums up to $9.5 billion, according to Rainmaker Information.

Meanwhile, group insurance claims paid rose 16% in 2023-24 to a record $5.8 billion, surpassing the previous high of $5 billion paid out in 2022-23.

Rainmaker also found that superannuation funds now offer average standard death and total and permanent disability (TPD) cover up to $225,000 for young members, dropping to $64,000 for pre-retirees.

For a 20-year-old this cover costs $2.25 per week on average, before rising to a high of $9.15 per week for members aged 55.

Cover plunges to $18,400 by age 65, which older members fork out $6.46 a week for.

Standard cover lifted through 2024-25 for all age brackets. Younger members under 35 saw modest increases ($4900 on average), while those aged 40 to 55 scored a more noticeable $6300 bump.

"This is a change from the previous year, where younger age cohorts saw a decrease in cover while older cohorts saw an increase," Rainmaker said.

For members in low-risk occupations, standard cover kicked off at $2.43 a week at age 20, climbs steadily to a peak of $8.78 by age 55, and eases slightly to $6.48 by 65.

High-risk workers, however, face steeper premiums from the start - $3.47 a week at age 20 - peaking at $12.09 by 55.

Premium value - the amount of cover a member gets per dollar of weekly premium - nudged up in 2025, rising 4% to $45,200 for a 40-year-old in a low-risk job.

This marked the first back-to-back annual increase since 2014, though the figure still sits nearly $15,000 below that year's peak.

Across the board, annual premiums for standard death and TPD cover rose, but only for retail fund members, who paid an extra $69 on average.

Interestingly, those over 45 bucked the trend, seeing a $92 average decrease.

Not-for-profit funds trimmed premiums by $29 on average.