March 2020 may be your last chance to lock in a great income protection policy. With the end of Agreed Value, insuring your income will never be the same.
Agreed Value means that you can lock in a monthly benefit amount when you purchase your policy, rather than having to prove what you’re earning when you’re ill or injured and making a claim. It’s often thought to be the superior option, but why?
For the self-employed, contract workers, commission earners and small business owners amongst us, it’s common knowledge that good business comes and goes. The benefit of Agreed Value is certainty. Certainty of how much money you will receive when times are tough enough that you need to make a claim.
On April 1st, this will disappear forever. Those with an irregular income will lose this level of certainty for their income protection benefit. If you want to lock in an Agreed Value policy before they disappear, you might want to start talking to an insurance expert today.
Here’s How It Works:
Step 1: Select your current age below.
Step 2: Once you answer a few questions, you will have the opportunity to compare quotes from up to 9 of Australia’s largest insurers. You may also be entitled to a free consultation.
It’s important to note that these upcoming changes will only apply to stand-alone, retail income protection policies, not policies taken through superannuation.
Looking forward, a number of significant changes have been flagged for July 1st, 2021. Two of the most important are:
1. Policies will no long be ‘guaranteed renewable’
For now, an income protection insurance policy can be locked in until age 65. As long as you keep paying your premiums, your cover remains in effect.
The proposed reform will limit this period to 5 years. As a result, after every period of 5 years the insurer has the right to revise the policy and re-assess the insured person.
The terms and conditions of the policy may change, in turn changing the circumstances under which you can make a claim. This could result in a poorer outcome for the person seeking insurance.
If, for example, you were earning less money than when you initially took out cover or you had started working in a ‘riskier’ occupation, the insurer could increase the cost of your cover or decide they no longer want to insure you.
Currently, the terms and conditions are ‘locked in’ once the income protection policy starts and can only be improved for the benefit of the insured person, rather than made worse.
2. Limits on ongoing claims
In an effort to control how long someone may receive a benefit for, particularly for policies where the benefit can be paid up until age 65, stricter definitions for disability are being proposed.
Currently, if you meet the conditions for a claim, you can receive your income protection benefit as long as you are unable to perform your normal job during the benefit period.
The proposed change would add a new criteria that you would have to meet to continue to be paid a benefit over a longer period of time.
Unless you meet this additional disability criteria, you may stop receiving your benefit.
Locking in Agreed Value
If you want to get ahead of these changes, we recommend that you start shopping for an income protection policy now.
After March 31st, you will no longer be able to apply for a policy with Agreed Value, and it is unlikely to return as an option in the future.
Your income is one of your greatest assets, and protecting it now can help you and your loved ones through times of severe stress in the future.
In fact, you’re more likely to claim on income protection insurance than you are to claim on your car, home or even life insurance*.
Our experts can help you find income protection cover that offers the cover you want without breaking the bank. So get started now, and lock in an Agreed Value policy before it’s too late.
Get Started Now:
Step 1: Select your state below.
Step 2: After answering a few questions, you will have the opportunity to compare quotes in your area and could be eligible for significant savings.