About 3% of income protection policies in for some changes save for new business rates, 2003-drafted policies and new business and in-force level premium rates. The changes are brought about by the Australian Prudential Regulation Authority report of over $110 million losses as of FY June 2012 and increased claims.
The effects will be felt by certain clients and those who are re-pricing on the following:
Lifetime benefits ____________________________ 30%
Age 50-65 benefit periods (IP and Income Care written pre 1997) 15%
Income Care policies written between 1997-2003 for Age 49 + 7.5%
Legacy income protection for professional occupations ____ 15%
The effective date of the changes is on 18 May 2013 and starting 2 April, affected clients will receive information letter that would include new premium amount, rate changes, CPI and age based indexation.
Monthly, over the next 8-12 weeks, information will be disseminated accordingly. You may need to talk to your financial planners and advisers about the changes, allowable procedures, right coverage or reduction of lifetime benefit period to age 65.