Income Protection Premiums Changes
The Australian Prudential Regulation Authority reported significant losses in the industry. The fiscal year June 2012 was said to have suffered over $110 million in losses.
This has prompted an increase in Comminsure income protection premiums and policies. However, the changes will not affect new business rates or policies that date back in 2003 and new business and in-force level premium rates will remain the same.
The expected increases are as follow:
- Premiums for all lifetime benefits – 30%
- Pre-1997 legacy IP and Income Care benefit periods for aged 50-65 – 15%
- 1997-2003 income care policies for aged 49 and above – 7.5%
- All legacy income protection policies for professionals – 15% (regardless of benefit period
A letter will be sent to affected clients informing them of the changes 7 to 11 weeks (starting 2 April) before their policy renewal date. It will include:
- Premium amount
- Premium rate change
- Usual CPI
- Age based indexation
- Effective date of changes which is 18 May 2013.
Re-pricing clients in the next 8 to 12 weeks will be given new premium rate and information will be sent to them.
Reviewing policies will ensure right coverage and policy alterations may help with affordability. You may also seek advice about life benefit reduction to Age 65. Make sure you get an up to date income protection quote with us today.