February 04, 2020
February 04, 2020 | Adviser News
End of Agreed Value Income Protection
To adhere to APRA’s sustainability measures for individual disability income insurance we’re closing Agreed Value Income Protection for new policies, effective 1 April 2020.
Last year, APRA released sustainability measures for individual disability income insurance. The first change to address the industry's poor performance of income protection and move to a sustainable state was to cease offering agreed value cover across the industry.
APRA requires life companies to cease offering agreed value (and endorsed agreed value) income protection by 1 April 2020. This applies to all policies (including direct) where the sum assured is based on earnings at policy application and does not consider earnings at time of claim.
For Wealth Protection, Active and Sumo this change will be effective from 1 April 2020, when new PDSs will be issued to describe only indemnity income protection.
How does this affect quotes and applications in progress?
- All agreed value electronic applications must be submitted before 1st April 2020.
- All agreed value paper applications must be signed and dated before 1st April 2020, but can be received by us until 30 April 2020.
New agreed value applications must complete by 30 June 2020. After that date we can only issue policies on an indemnity basis. Any agreed value submissions that haven’t completed by the cut off date, will need to be resubmitted as indemnity policies.
Zurich Adviser Portal quotes will reflect the changes from 1 April 2020. Any agreed value income protection applications which have been created but not submitted will update automatically to indemnity on that date.
How does this affect existing customers with agreed value?
Existing Zurich customers with agreed value income protection as at 1 April 2020 can continue to maintain and increase their cover as before; there are no new restrictions on CPI increases, Future insurability increases or underwritten increases. Refer to the relevant Adviser Guide for full details of alteration requirements.
How do I order the Wealth Protection, Active and Sumo PDSs?
From 1 April 2020, you can order printed copes of the new PDS via the Zurich Adviser Portal. Electronic versions will also be available for download from 1 April 2020.
For more information please contact your Business Development Manager.
This information has been prepared by Zurich Australia Limited ABN 92 000 010 195 AFSL 232510 (issuer of Zurich life insurance products). It is for the use of advisers only. The information is current as at February 2020 but may be subject to change without notice. Updated information will be available by contacting your Business Development Manager.