Insurance in super opt-in rules: under 25, low balances and inactive accounts

Default insurance in super is now switched off in three situations unless you tell your fund you want it: when your account has received no contributions or rollovers for 16 continuous months (Protecting Your Super, from 1 July 2019), when you are under 25 and joined after the rules began, and when your balance has not reached $6,000 (Putting Members' Interests First, from 1 April 2020). Opting in is usually a simple online election or form with your fund. There are exceptions for some dangerous occupations, defined benefit members and employers who pay for the cover. If you rely on super cover, check today whether it is actually active.

This guide is part of the costs and rules overview.

Why the rules exist

Before 2019 many Australians held several super accounts, each with default insurance. Premiums were eroding small balances, particularly for young and part-time workers who were unlikely to have dependants. The Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 and the Treasury Laws Amendment (Putting Members' Interests First) Act 2019 amended the Superannuation Industry (Supervision) Act 1993 so that cover becomes opt-in for groups where premiums were most likely to do more harm than good. The trade-off is that people who do need cover can lose it without noticing.

The three triggers

A few points that often confuse people:

• Inactivity is about money going in. Investment returns and fees do not count. An account that only receives earnings is inactive.
• The 16 months are continuous. One contribution or rollover restarts the clock.
• The $6,000 test looks at whether the balance has reached that amount. Once reached, a later fall below $6,000 does not by itself switch default cover off.
• Under 25 is about age. When you turn 25 and your balance has reached $6,000, default cover can start if you are receiving contributions, typically with notice from the fund.

Funds are required to warn members before inactivity cover is cancelled; in practice notices are sent as the account approaches 16 months, often at 9, 12 and 15 months. Keep your contact details up to date so the notices reach you.

Exceptions

The law allows default cover to continue or start despite the triggers in some cases:

1. Dangerous occupations. A trustee can elect to provide default cover to under-25s or low-balance members in occupations it classifies as dangerous, such as some mining, construction, emergency services or other high-risk work. The trustee must publish the election and report to APRA.
2. Employer-sponsor contributions. If your employer pays contributions above the super guarantee to cover the cost of the insurance, cover can continue.
3. Defined benefit members. Defined benefit arrangements are generally outside these rules.

If you think an exception applies to you, ask your fund in writing.

How to opt in

1. Log in to your fund's online account or app. Most funds have an "opt in to insurance" or "keep my insurance" election.
2. Or complete the fund's form. It may be called an election to maintain cover or an opt-in form.
3. Check what you are opting in to. You are usually opting in to the fund's default cover. Extra cover above default still needs an application with health questions.
4. Confirm in writing. Download or ask for a confirmation and check your next statement.
5. Keep the account active, or keep the election current. An election to keep cover on an inactive account generally lasts until you withdraw it, but rules vary by fund. Read the fund's insurance guide.

Worked example: two accounts, one dependent family

Priya, 34, has two super accounts:

• Fund A, from an old hospitality job, balance $4,800, no contributions since February 2025.
• Fund B, her current employer fund, balance $68,000, receiving contributions, with default death and TPD of $250,000.

Fund A's last contribution was in February 2025, so 16 months of inactivity ended in June 2026. Its default death cover of $150,000 was cancelled, and Priya did not respond to the notices. Her cover is now $250,000 in Fund B only.

Priya has a partner and a toddler and a $450,000 mortgage. Losing the Fund A cover reduced her total to $250,000. Her choices are to apply for extra cover in Fund B (with health questions), take out retail cover, or ask Fund A whether reinstatement is possible. Before she consolidates Fund A into Fund B, she should check that nothing else of value sits in Fund A. In her case the cover is already gone, so consolidating saves fees with no insurance downside.

When not opting in makes sense

If you have no dependants, no significant debts, and are under 25, default death cover may cost more than it is worth to you. TPD and income protection protect you, not dependants, so they can still matter for young workers, especially in physical jobs. Work through how much life cover you need and how much TPD cover you need before deciding. The rules cut cover automatically to protect balances; they do not decide whether you need cover.

Frequently asked questions

Will my fund tell me before cancelling cover?

Funds must notify members whose accounts are becoming inactive, and you can elect to keep cover. Notices go to your last contact details, so update them after moving.

Do salary sacrifice or personal contributions count?

Yes. Any contribution, including employer super guarantee, salary sacrifice, personal or spouse contributions, or a rollover in, makes the account active.

Does opting in mean health questions?

Usually not for default cover. Applying for more than default cover, or for reinstatement after a long gap, usually does.

Where do I find my super accounts?

Through ATO online services in myGov, which lists accounts reported by funds, including lost and ATO-held super.

Sources

• ATO — finding and consolidating super, inactive low-balance accounts
• Moneysmart — insurance through super
• APRA — trustee obligations and insurance in super data
• Federal Register of Legislation — Superannuation Industry (Supervision) Act 1993