By Philippa Billings, Head of Advice, Otivo
It's one of those questions most of us avoid. If something happened to you tomorrow — an illness, an accident, or worse — would your family be okay financially?
For millions of Australians, the honest answer is no. Research from the Financial Services Council found around one million Australians are underinsured for death and total and permanent disability cover, and a further 3.4 million don't have enough income protection. A Deloitte report put it even more bluntly — the gap between the cover Australians have and the cover they need costs families around $25 billion a year in benefits that could have been paid if the right insurance had been in place.
The frustrating part is that most people don't even know they're underinsured. They assume the default cover that came with their super fund has them sorted. In reality, default cover is a one-size-fits-all number that has nothing to do with your mortgage, your income, or the people who depend on you. Industry research suggests it typically provides only around two-thirds of what a household actually needs — and often much less.
Why does this happen?
Working out how much insurance you need has traditionally been hard. You'd either guess, ignore it, or pay thousands of dollars for a financial adviser to run the numbers. So most people did nothing.
And doing nothing has a cost. Your life changes — you buy a home, have kids, change jobs, take on debt — but your insurance doesn't change with you. The gap between what you have and what you need quietly grows, and you only find out when it's too late to fix.
Otivo works it out for you — and tells you what it costs
Otivo's personal insurance advice looks at your whole situation — your income, debts, family, and existing cover inside and outside super — and works out exactly how much cover you need across four types of insurance.
Life (death) cover — a lump sum paid to your family if you pass away, so they can clear debts and keep the household running.
Total and permanent disability (TPD) — a lump sum if you're permanently unable to work due to illness or injury.
Salary continuance (income protection) — a monthly payment that replaces part of your income if you can't work for an extended period.
Trauma cover — a lump sum if you're diagnosed with a serious illness such as cancer, a heart attack, or a stroke.
For each one, Otivo shows you three simple numbers. What you currently have. What you actually need. And the gap in between. No jargon, no guesswork — just a clear picture of where you stand, with a plain English explanation of how we worked it out.
Instant quotes, not vague estimates
Here's what's new. Otivo now gives you an instant quote for how much your recommended cover could cost — right there on screen, the moment your advice is ready.
That matters, because cost is the number one reason people put insurance in the too-hard basket. When you don't know whether closing your cover gap costs $20 a month or $200, it's easy to keep putting it off. Otivo removes the mystery. You see the recommendation, you see the price, and you can decide with real numbers in front of you.
Because much of this cover can sit inside your super, the premiums can often be paid from your super balance rather than your take-home pay. Otivo shows you how that works for your fund, and factors the cost into your retirement projections so you can see the full picture — not just the protection, but what it could mean for your super over time.
From advice to action in minutes
Every recommendation comes with a clear next step. Tap "How to action this advice" and Otivo walks you through exactly what to do — whether that's increasing your cover inside your existing super fund or arranging cover outside super.
It's the same quality of advice you'd expect from a professional adviser — Otivo holds an Australian Financial Services Licence (AFSL 485665) — delivered in minutes, for a fraction of the cost.
Don't wait to find out the hard way
Underinsurance is invisible right up until the moment it isn't. The good news is that checking where you stand now takes minutes, not weeks — and knowing your numbers is the first step to fixing them.
Log in to Otivo, head to your insurance advice, and see your cover gaps and instant quotes today. A few minutes now could mean you — and the people who count on you — will be better off.
Frequently asked questions
Does everyone with a super account have insurance?
No. Default cover generally starts automatically once a member is 25 or older with a balance of at least $6,000, and by law funds cancel cover on accounts that haven't received a contribution for 16 months. Checking a statement beats assuming — some accounts carry cover their owners don't know about, and others carry none at all.
Can trauma cover be held inside super?
Generally not for new policies. Super funds stopped offering new trauma cover in July 2014, though some members who took it out before then still hold it. Trauma cover is now usually arranged outside super, directly with an insurer.
When does insurance through super end?
According to MoneySmart, TPD cover in super usually ends at age 65 and life cover at age 70. Cover can also end earlier if an account becomes inactive or the balance falls too low, so the expiry rules are worth knowing before they matter.
Underinsurance stays invisible right up until it isn't. The encouraging part is that seeing where a household stands takes minutes rather than weeks — three numbers per cover type, a price alongside them, and a clear next step. For anyone who's been meaning to look, Otivo's insurance advice is a practical place to start.
Sources
- Financial Services Council / NMG Consulting, Australia's Life Underinsurance Gap Research Report, October 2022 — fsc.org.au
- Deloitte, Mind the gap — How to provide the Australian community with the life insurance it needs, August 2023 — deloitte.com
- Rice Warner, Underinsurance in Australia 2020 (as reported by Super Review) — superreview.com.au
- ASIC MoneySmart, Insurance through super — moneysmart.gov.au
Disclaimer
The information in this communication is current as at July 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.