For clients holding policies with either AMP or Asteron, prices have recently been increased by approximately 5 – 12.5% (depending on whether you have an Income, Trauma or Permanent Disability policy).
In simple terms, the rate of claims (i.e. money going out the door) has exceeded the rate of income (i.e. money coming in the door) that the insurer estimated would be needed. Insurers are obliged to report on a regular basis to their regulator (Australian Prudential Regulatory Authority) and confirm to APRA they have plenty of ‘reserves’ (i.e. they must prove the money’s going to be there if you need to make a claim).
Whilst no one likes a price rise, if there’s the risk an insurer can’t pay claims in the future (maybe yours!) because extra claims are depleting the reserves, then regrettably that’s when APRA says the price can longer stay ‘cheap’ – they have to be increased.
GO SOMEWHERE ELSE?
Clients with an Industry Super account will know it was only a few years back that they experienced premium increases on average of 50% - yet again proof that you can’t stay too cheap for too long. Life Insurance Premiums Skyrocket
Insurer’s don’t want to lose their loyal customers and are motivated by competitors ‘breathing down their neck’ to only increase by the smallest amounts necessary. They are very much aware of the 10 other competitors in the market who would love to swoop on their business if they became too pricey.
As a licenced adviser, I have the authority and capability to compare premiums from across the market. We can analyse and identify what policies represents better value for you.
Protecting your lifestyle and wealth is one of the cornerstones of good financial planning. While you work with your WP Wealth Management advisor to build strategies for your future it is important to have a safety net and contingency plan in place.
As WP Wealth Management is not owned by or aligned to any particular insurance provider, our advisors can advise you on the right insurance type, level and product most suited for your circumstances.
It’s critical to have a Will so that in the event of your death, your assets are distributed according to your wishes. This is particularly important if you have family or dependents as it ensures that your estate is administered quickly and efficiently.
Mike Allanson and Guardian Risk Management Pty Ltd. ABN 89 009 439 516, t/as WP Wealth are Authorised Representatives of WP Wealth Professionals Pty Ltd. ABN 22 655 645 999. AFSL 537458.