- New flexible cover underwriting offer
- Increased flexibility on Premium and cover holds (referred to as a Premium holiday) provision
As an insurer, we understand that following the sudden shutdown of many parts of our economy and the resulting sharp increase in unemployment and decline in cash flow for many businesses, many Australians will look to reduce household and personal expenditure. We also know that customers value the importance of insurance and want to retain their cover more than ever.
With this context, Zurich has short term premium relief options to help assist advisers and customers with premium payments in the face of this global pandemic.
Zurich Premium Relief Options
Flexible cover offer
The flexible cover offer allows a temporary reduction in sum insured or insured monthly benefit to lower premiums and ease financial pressure. While a reduction in cover can be processed at any time, this offer will allow all cover (or part thereof) to be reinstated without assessment of health or financial circumstances within 12 months.
The portion of cover that is reinstated under this offer will be subject to the terms and conditions that apply to policy reinstatements relevant to that cover, including any exclusion periods which apply when a policy is reinstated. For example, if your client reduces and reinstates Death cover, there is normally an exclusion which states that death due to suicide within 13 months of any reinstatement is not covered. Exclusions vary depending on which covers are on the policy – customers should refer to their policy document for full details. TPD, income protection and business expenses covers will additionally be subject to a 90-day accident-only cover period on the portion of cover reinstated.
Premium and cover holds (Premium holiday) – increased flexibility
A premium and cover hold (referred to as Premium holiday) is an existing policy feature under Wealth Protection, Active and FutureWise. It allows cover and premiums to be put on hold for up to 12 months over the life of the policy. It is important to note that the customer will not be covered whilst the premium holiday is active.
We have increased the flexibility of the premium and cover hold benefit and will agree on request to allow:
- Premium and cover holds (Premium holidays) to be issued on policies which have been in force for less than 12 months and commenced prior to 11 March 2020, on evidence of financial hardship.
- Premium and cover holds (Premium holidays) to be extended where the maximum total period of 12 months has already been exhausted (up to six months additional premium holiday is available)
- Customers to invoke more than one premium and cover holds (premium holiday)within 12 months from the original waiver.
This temporary easing in underwriting is designed for existing customers who are seeking short term financial relief. Both offers are subject to terms and conditions and are available for a 6-month period, from 1 May 2020 – 31 October 2020 (unless extended).
As a timely reminder, Zurich income protection policies have an involuntary unemployment premium waiver available where premiums will be waived for 3 months for involuntary unemployment.
Additionally we are seeing many customers taking other options to help maintain cover at affordable levels, including:
- Change cover from a fully featured level to a less fully featured level, for example changing income protection from Income Protector Plus to Income Protector
- Change cover from agreed value to indemnity
- Increase waiting period (eg: 30 days to 90 days)
- Reduce benefit period (eg: 5 years to 1 year)
- Remove extra cost options from policy
- Move policy to a superannuation environment to receive a tax credit
- Change payment frequency to annual or half yearly
- Quit smoking > 1 year & change to non-smoker rates
For more information on our affordability options, please speak to your BDM who will be able to discuss them with you on a case by case basis.