Default life insurance cover in superannuation should remain opt-out says one major insurer, despite recent data revealing that a quarter of fund members are being charged fees for life insurance policies sitting in idle funds.

In a submission to a parliamentary joint committee inquiry into the life insurance sector, AIA Australia says that moving from an opt-out to an opt-in system for life insurance could result in more than 13 million fund members being left without protection and see a drop from 90 per cent of insured individuals to a low of 18 per cent.