About 1.7 million Australians will see their insurance premiums jump from June, after AustralianSuper raised prices across its cover.
According to reporting by the Australian Financial Review, the fund said the increase is driven by a surge in mental health and disability claims, particularly among younger members who have been unable to return to work. The change reverses three years of falling insurance costs. In a message to members, AustralianSuper said it was only passing on “what it costs to provide your insurance.”
The biggest increase will apply to total and permanent disability cover, which will rise by an average of 40% a year across different member groups. Death cover will go up by an average of 20%, while two-year income protection premiums are set to rise by 38%.
The increase reflects a wider issue in the life insurance sector. The value of mental health claims has climbed from $1.2 billion in 2019 to $2.4 billion in 2024, putting more pressure on the cost of cover.
“This sustained growth in mental health claims is placing real pressure on the affordability and sustainability of cover across the system,” Council of Australian Life Insurers chief executive Christine Cupitt said, adding that the sector was seeing “consistent year-on-year increases in claims, and a growing number of people, particularly younger Australians, are becoming permanently unable to work due to mental health conditions.”
The council said that life insurers received 21,425 total and permanent disability claims linked to mental health conditions in 2024 through group insurance plans. That was about one in every three TPD claims.
For AustralianSuper members, the cost will vary depending on the type of work they do. A 45-year-old member in a white-collar job will pay $236 a year for basic cover, while a member of the same age in a blue-collar job will pay $526 a year. AustralianSuper has 3.6 million members, but only around 1.7 million are insured through the fund.
The fund said the increases still leave its insurance rates below 2022 levels, after premiums were reduced over the previous three years.
“AustralianSuper’s insurer TAL had one of the highest proportions of claims paid, the quickest approval times, and the lowest rates of dispute in the superannuation industry for the year to June 2025,” a fund spokesman said.
TAL said it was working with super funds to keep premiums sustainable.
“Last year, more AustralianSuper members relied on this important safety net than ever before, with more than 12,000 members and their families receiving over $700 million to support them through loss, injury and illness. Pricing reflects the cost of claims paid to AustralianSuper members,” TAL said.
