Pressure is building on the the federal government to reconsider its controversial plans to overhaul life insurance linked to superannuation to ensure that members who are working are automatically signed up to a policy even if their balance is low.

Brett Clark, the boss of the country's largest life insurer TAL said 900,000 retirement savers would be better off under under a proposal it has made to a senate economics committee currently reviewing the budget proposals known as the "protecting your superannuation package".