Coal industry superannuation fund Auscoal Super is following the lead of other large industry funds and considering changing its insurance offering to include default income protection (IP) coverage.

The fund has asked insurance broker Aon to investigate whether this type of insurance would suit Auscoal's members.

"The mining industry is one where a lot of employees are covered by their employers under various arrangements," Auscoal strategic projects manager Col McGuinness said.

"We're still going through the discovery process to see how many are already covered. The last thing we would want to do is to introduce a default cover and have people paying for IP twice."

McGuinness said a formal proposition was yet to be put to the Auscoal board and the decision would most likely be made by the end of 2010.

"We are conscious of Australia's problems with underinsurance, but it's an area that's been left alone because of the complexity and the general resource in industry funds is not huge to be able to look at this, but our directors want to be sure that they're doing the appropriate thing for the membership," he said.

Currently only a few industry funds, including REST Superannuation, offer IP insurance. Last year, AustralianSuper offered the insurance coverage to members as a default option when it inked a new deal with Tower Australia.

"It is two things: it is recognising what members are saying they are wanting, but also recognising that most members don't make conscious insurance decisions, so default arrangements are really important because that's what most members are going to end up with," AustralianSuper chief executive Ian Silk told The Australian.

Auscoal's current insurer for death and total and permanent disability is CommInsure.

McGuinness said the fund would look at the wider marker for IP coverage.