The Federal Government has introduced legislation to end default life insurance in superannuation for members aged under 25 or with account balances below $6000.

A bill that passed the Senate last week scraps default insurance for members with inactive accounts – 16 months with no activity – but retains cover for active accounts, under amendments made by the Greens.

The Coalition’s Senate leader Mathias Cormann vowed after that vote to continue trying to pass legislation on under-25s, which is opposed by the insurance industry.

The legislation would take effect on October 1.

When introducing the bill, Assistant Treasurer Stuart Robert claimed insurance premiums can reduce low-balance accounts by 10% or more.

Some members pay for cover that goes beyond their needs, or have multiple policies on which they cannot claim, he says.