Income Protection Policies: Changes are imminent!
If you could not work for an extended period because you were sick or injured, how would you maintain your current financial needs and future lifestyle?
One option is to self-fund through savings or the sale of assets, however it is likely this will draw down on your retirement aspirations. Another is income protection, which provides for those financial needs if the worst case happens.
There are major changes at play for all new income protection policies due to recent regulatory intervention by APRA.
As a result, if you do not already have comprehensive income protection cover in place, consider acting soon. Claims criteria will be impacted to some degree through both the payout you will be allowed to receive, and the disability definitions that will be used in that process.
On top of that, the contract conditions are set to alter from ‘Guaranteed Renewable” (each year without question), to a 5 year period whereby new financial information will be required and policy conditions at that time will be adopted.
These changes will result in significantly watered-down policies compared to what is currently available in the market, and you don’t have long to do something about it. Several insurers have indicated the new products are likely to be rolled out early in the new year even though the deadline for change is October 2021.
We recommend all clients being remunerated for their work should consider income protection, preferably while they are young and healthy - and most importantly before these current policies change forever. It just makes sense for you to look after what is arguably your most valuable financial asset – that is, your ability to earn an income.
Please feel free to get in touch with our in-house team of specialists if you would like some help to navigate your way through this, or to review the cover you currently have in place.
Please remember, time is running out!
If you would like to review your personal insurance, please get in touch with our team.