Group Insurance

Group insurance provides life insurance, TPD insurance, income protection, and sometimes trauma insurance to groups of people under a single master policy, most commonly through employers or superannuation funds. The insurance is underwritten collectively rather than individually, offering significant advantages including simplified or automatic acceptance (often no medical underwriting required for default coverage levels), lower premiums due to group buying power and reduced administrative costs, convenience of payroll or super deduction, and automatic coverage for new group members. In Australia, most superannuation funds provide default group insurance coverage to members, offering basic life and TPD insurance (and often income protection) automatically upon joining. Employers may also arrange group insurance for employees as a workplace benefit. However, group insurance has important limitations compared to retail (individual) insurance policies: coverage amounts may be insufficient for high earners or those with significant debts, definitions (particularly for TPD) may be more restrictive (typically 'any occupation' rather than 'own occupation'), policy terms may be less comprehensive with fewer optional benefits, coverage typically ceases when you leave the employer or super fund, and individual customization is limited. Group insurance premiums are calculated based on the average risk of the group rather than individual risk profiles, meaning younger and healthier members may subsidize older or less healthy members. For superannuation-based group insurance, premiums erode retirement savings as they're deducted from your super balance. APRA regulates group insurance through superannuation funds, and recent reforms have improved transparency, portability, and value. Group insurance is most suitable as baseline protection, often supplemented with retail insurance for comprehensive coverage.