Category: Basics
No. New Trauma cover cannot be held inside super. Since 1 July 2014, SIS Regulation 4.07D has prohibited super funds from issuing new insurance that does not align with a SIS condition of release, and Trauma (lump sum on diagnosis) does not meet one.
The restriction sits in the Superannuation Industry (Supervision) Regulations 1994, Reg 4.07D, supported by the sole-purpose test in SIS Act 1993 s62. Pre-1 July 2014 super-held Trauma policies were grandfathered and may continue under their original terms.
Super funds can only provide insurance benefits that line up with one of the SIS conditions of release. The four insured conditions are death, permanent incapacity, terminal medical condition, and temporary incapacity. Trauma pays on the diagnosis of a listed Critical Illness Event such as cancer, heart attack, or stroke, regardless of whether you can still work. Because the insured may fully recover and return to work, the Trauma trigger does not match any condition of release.
This was the policy reason for the 2014 restriction: insurance held inside super must serve the sole purpose of providing retirement, death, or disability benefits, not a lump sum for an insured who continues to earn.
All nine panel insurers structure Trauma cover outside super. Some make the rule explicit in the PDS.
| Insurer | Trauma availability inside super | PDS evidence | |---------|----------------------------------|--------------| | AIA | No Superannuation Crisis Recovery Plan; Crisis Recovery is Stand Alone or Rider Benefit to Life Cover (held outside super) | AIA Priority Protection PDS (9 November 2025), Section 4 | | Zurich | "trauma insurance can't be held in superannuation because most trauma events wouldn't" satisfy a condition of release | Zurich Wealth Protection PDS (1 November 2025) | | TAL | "Critical Illness Insurance cannot be structured through superannuation" | TAL Accelerated Protection PDS (12 December 2024), Section 2.3 | | OnePath | Trauma Cover outside super; SuperLink Trauma links super-held Life to outside-super Trauma | OnePath OneCare PDS (1 October 2025), page 49 | | ClearView | "Trauma Cover is not available inside super" | ClearView ClearChoice PDS (13 May 2024, Update 5 June 2025) | | NEOS | Critical Illness Cover outside super only | NEOS Protection PDS (6 December 2024) | | Encompass | "Critical Illness Cover is not available inside super" | Encompass Protection PDS (26 September 2025) | | Acenda | Acenda Insurance (Super) variant excludes Critical Illness insurance | Acenda Insurance PDS (27 September 2025) | | Futura | Critical Illness Cover outside super only | Futura Protection PDS (1 October 2025) |
OnePath OneCare offers a SuperLink Trauma structure for clients who want Life and TPD inside super but Trauma alongside. The Trauma cover itself is held outside super. SuperLink links the outside-super Trauma to the super-held Life so that premiums and underwriting can be co-ordinated. The structure does not place Trauma inside super; it links the two contracts at the policy-administration level.
Do not describe SuperLink as "Trauma inside super". The Trauma component remains an outside-super retail policy.
Three consequences follow from the outside-super rule.
A self-managed super fund is subject to the same SIS Act and SIS Regulations as any other super fund. SMSFs may hold Life and TPD insurance that meets a condition of release, but may not commence new Trauma cover since 1 July 2014. Pre-2014 grandfathered super-held Trauma policies in SMSFs may continue under their original terms.
A grandfathered policy can continue, but think carefully before cancelling. New replacement cover must be outside super and premiums will come from after-tax income. Discuss any restructure with a licensed adviser before changing legacy cover.
This is general information, not personal advice.
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