Compare the cost and benefits of holding life, TPD, and income protection insurance inside vs outside your super fund.
Updated October 2026Built and checked by MaverickHow it's calculatedReport an error
Annual premium
$960
from super balance
Equivalent outside
$1,371
at 30% marginal rate
20-year retirement impact
$44,078
premiums plus returns at 8.0% a year
Marginal tax rate
30%
on your next dollar of income
Inside super, premiums come out of your balance. Outside super, life and TPD premiums come from after-tax income; income protection premiums you pay yourself are tax deductible, which narrows the gap.
Most Australians have some form of insurance through their super fund, often without actively choosing it. While insurance in super has the advantage of being paid from your super balance (not your pocket), it also erodes your retirement savings. This calculator shows what your premiums cost your retirement balance, compounded at the median MySuper return, and how the same premium compares with paying it from after-tax pay.
Across 50 MySuper products, the typical return over the ten years to 30 June 2026 was 8.0% a year after fees and tax, and the typical fee on a $50,000 balance was $408 a year, from APRA's data.
Mia is 28 with $45,000 in super. She's paying $65/month in default life and TPD insurance. She has no dependants or mortgage.
Mia pays $780 a year. Over 20 years, at the MySuper median ten-year return of 8.0% a year (to June 2026), those premiums and the returns they would have earned come to about $35,700 of retirement savings. With no one relying on her income, she may need little death cover; whether to keep TPD depends on how she'd manage if she could never work again.
Ben, 40, has $200,000 super, a $500,000 mortgage, 2 kids, and $300,000 in life cover through super.
Ben earns $120,000. Replacing 15 years of income, clearing the $500,000 mortgage, setting aside $50,000 of education per child and $15,000 for a funeral comes to about $2.4M on the life insurance calculator, well above his $300,000. He can increase cover through the fund or add a policy outside super.