In a statement on its website, the insurer said some level premium income protection clients will receive “an average 20 per cent premium increase” on their policy from 6 May 2018.
The statement said the increases were necessary for the company to ensure it can pay claims.
“At CommInsure we are proud to play an important role in securing the financial wellbeing of our clients, paying over $1 billion in life claims during 2017,” the statement said.
“In order to ensure that we can continue this important role, it is incumbent upon us to regularly review the experience of claims against premiums charged for all insurance cover provided. As a result of numerous factors, including higher than expected claims experience and a sustained low interest rate investment environment, income protection premium rates are being reviewed across the Australian life insurance industry.”
Advisers with affected clients will receive a spreadsheet outlining the changes for those customers two months before their policy anniversary, the company said.
“Notification of changing premium rates creates an opportunity for clients to review their insurance and consider both affordability and perceived value,” the statement said.
“[Advisers] can help clients understand what can be changed to manage affordability (e.g. reduce benefit period, increase waiting period, reduce sum insured, change to split IP) while also retaining their important insurance cover.”
I am affected by this increase which has made this policy unaffordable for me. My quesiont is, what can be done about it? I’d like compensation before cancelling my policy Maybe a refund of all my contributions? A 24.4% premium increase is not a “level’ policy whichever way you look at it. Surely a premium hike has to be reasonable??
I think your headline should accurately read “Comminsure hikes income protection premiums AGAIN” .
Lets not forget that this is a member of the dodgy cartel that is the FSC. All the FSC members have been doing the same and at similar levels since meeting to con everyone into the LIF. The same members however are now also reducing premiums only on new business to try and encourage churn. The FSC are worthy of the Royal Commission.
Correct, AMP apparently pays commissions on old AMP policies being churned to new AMP policies to reduce chance of claim. If that isn’t a massive issue that should come up in the royal commission, I don’t know what is.
The way the insurers have treated their Level commission clients is a disgrace. These people took these policies with intentions of them providing long term affordability and are effectively locked in now (due to either health issues or just the fact that they are older) and the insurers are using the opportunity to have these clients pay for their mistakes in risk weighting their book. This one is worthy of the Royal Commission.
Sure the insurers made mistakes in risk weighting their book. But the biggest mistakes they made were:
– not foreseeing the media misrepresentation about rejected claims, which have forced insurers to pay out lots of dubious claims to avoid media vilification.
– not foreseeing the growth of the mental health lobby, which has driven an explosion in mental health claims.
At the end of the day these extra claims have to be paid for by someone. Like all insurance, the majority of claims funding comes from the other policyholders who don’t claim. Premiums and claims rise and fall together. Some will say that the rise in claims & premiums in recent years is a good thing. Others will say it’s a “disgrace”. But your brickbats or bouquets should be directed at the media and the mental health lobby, because they are the ones who have caused it.
So, its because of poor investment returns and more than expected claims is it ?
So why no increase for stepped premium’s- or do they claim less ? Looks like a gouge, sounds like a gouge, walks like a gouge, just as CBA walks away. Bugger Comminsure !
The article could have said the increases are in respect of [color=aqua]policies inforce pre Feb 15th 2014[/color]…. Just saying, before all the rewriters get excited.
CommInsure News
Income Protection
Effective from 6 May 2018, clients with level premium income protection policies inforce prior to 15th February 2014 will have a change to their premium rates.
Keep on increasing premiums at current levels and there will be no need to meet the education requirements because their won’t be any clients left to provide advice to. RIP Risk Advisers :x?
Another blow, just walk away from it all, retire and enjoy life which is too damn short.
“[Advisers] can help clients understand what can be changed to manage affordability ….hmmm maybe not take out Level premiums that increase by 20% !!!
and my favourite…“Notification of changing premium rates creates an opportunity for clients to review their insurance and consider both affordability and perceived value,” the statement said…. and if you move the policy due to these exorbitant price rises you get called a churner and get reported to ASIC!!
True on both counts above, and they blame advisers for churning, not just making sure the client gets the best deal.
I think that you are being incredibly hard on Comminsure. They are screwing both advisers and clients without favouring one or the other. By limiting the increase to Level premium policies Comminsure have entrapped those clients who are least likely to feel that they can go to another provider.
A brilliant gouging strategy.
You claim that it is ‘true-level’ ….well not if you find another underhand way of increasing the premium.
So much for pricing parity and perceived possible premium reductions for clients in a post LIF world. Passing on to clients the reduced commissions payable to advisers through lower premiums,would be the moral thing to do by the respective insurer!
Hmm? Level premiums? Increasing by 20%?
So much for the expectation of level premiums…
And they wonder why moving a client happens??