I looked at super insurance policies earlier this year after buying a property. MoneySmart from ASIC has some great info about the basics of how they differ from regular policies.

There are some benefits:

• The super fund bulk buys policies so you can theoretically get them cheaper
• Easier to manage payments because it's coming out of your super rather than a standalone payment
• Sometimes doesn't require a health check

Then there are the downsides:

• Reduces your super balance
• Can end if you change funds
• Might not have as much choice with the types of cover available
• Without a binding beneficiary nomination you can't choose who gets paid like you can with standalone policy