Income Protection Insurance

All new Income Protection Insurance policies will change forever by 1 October 2021 as a result of recent intervention by APRA to create a more sustainable Life Insurance industry.

If you’ve been considering Income Protection you should act well in advance of the deadline - this is not a 5-minute process.

So - what’s changing?

Claims Criteria

• Future - Claims criteria will be based on the “immediate 12 months earnings prior to disability”.
• Current - The “best rolling 12 months over the preceding three years” rule provides greater financial flexibility.
  
  

Payments

• Future - Claims proceeds to be capped and will reduce over time.
• Current – Generally policies make a payment for up to 75% of your income plus superannuation while you remain on claim.
  
  

Disability definitions

• Future - Disability definitions used will be more difficult to satisfy and vary depending on the length of time on claim.
• Current – Definitions are market leading and what you signed up to initially, for the life of the contract.
  
  

Renewals

• Future (By October 2022) – 5-year policy renewals when current occupation and financials will be required – any new policy conditions at this time will apply.
• Current - Contract conditions are “guaranteed renewable” – that is, set and forget.
  
  

In practical terms, these changes will result in significantly watered-down policies compared to what is currently available in the market. This is why you need to take action now if income protection has been on your list of 'things to do'.

If you would like help to navigate your way through or simply a review of your current personal insurance, please get in touch with our in-house team of specialists as soon as possible so we can assist before time runs out.