CommInsure has announced a significant increase in premiums for a number of its level premium income protection policies.
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.”
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