If you do not have income protection insurance or are in need of a review, now is the time to organise it. 
 
Effective from 31 March 2020, insurance companies must stop providing ‘agreed value’ policies that are based on the income you advise at the start of cover, regardless of any subsequent change in income. This means no more ‘agreed value’ contracts can be bought or sold after 31 March 2020. Claims made on policies taken out after this time will be based on annual earnings at the time of claim, no older than 12 months. 
 
Australian Prudential Regulation Authority (APRA) announced that they were concerned that insurance companies had been keeping premiums at unsustainably low levels to compete for customers. APRA also thought that some policies have very generous features and terms that, in some cases, provide a financial disincentive for people to return to work after successfully making a claim. 
 
These changes could have great ramifications for the consumer, as it could potentially mean receiving a claim payout of significantly less value than what the on-going premium payment was based on. 
 
Following these proposals effecting ‘agreed value’ policies, we recommend you get in touch with our financial planning team to discuss your insurance options and ensure you are fully informed on the implications before they come into effect.

Book an appointment with the team online or call our office on 8208 4777 to speak with a member of our team.