APRA has introduced requirements for insurers to review their Income Protection products and adjust some benefits and the way Income Protection contracts work. The core aim of these changes is to improve the longer-term affordability of Income Protection for customers.
Considerable increases of claims costs associated with illnesses such as breast cancer, mental health and musculoskeletal issues have in part led to these changes. Unfortunately, these conditions have affected far more people than insurers have anticipated, and the industry has reacted with insurers across the country increasing income protection prices.
What does it mean for existing policyholders?
Firstly, and importantly, your current Income Protection cover remains as it is with all its included benefits and current income replacement ratios.
These changes only impact NEW Income Protection policies.
You may be impacted if you lapse or cancel your policy in certain circumstances after October 2021. If you let your current policy lapse after this date, you won’t be able to reinstate this cover. From October 2021 only the new Income Protection products that meet the new regulations can be purchased.
What should you do if you need to make changes?
We recognise that premium affordability is an ongoing consideration. The APRA guideline changes highlight the importance of having comprehensive cover through complementary insurance products. Reviewing your current levels of cover to ensure that they meet your needs prior to the introduction of the October guidelines is important.
What should you do if you want a new income protection policy?
We encourage you to make contact with our Insurance Specialist Brent Olszewski as soon as possible, prior to the October deadline. This will allow you to secure, subject to eligibility, an income protection policy under the current settings.
Talk to Brent, our insurance specialist ...
To discuss your risk insurance requirements contact Brent Olszewski on (03) 5331 3711 or complete the enquiry form.
PPT Financial Pty Ltd ABN 64 050 243 073 Australian Financial Services Licence No 252992
Director Representatives: Tim R Hovey, Peter J O’Connell, Cameron R Moore, Brent P Olszewski
DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.