MLC Life Insurance will freeze any increases on base premium rates for existing policies for a period of one year, effective from 10 October 2017.
The freeze will apply to polices within the MLC Insurance, MLC Insurance Super, Protectionfirst, Personal Protection Portfolio and Life Cover Super ranges with the insurer stating it would apply until at least 1st October 2018.
The pricing halt would also apply to future premiums payable for new customers after 9 October 2017 with MLC Life guaranteeing those premium rates until 1 January 2020, and limiting any future premium rate increases to a maximum of 10% until 1 January 2022.
MLC Life also confirmed with RiskInfo that the changes would apply to stepped and level premium products, and only increases due to the annual age rate, CPI and relevant stamp duties would be applied.
“Our retail customers make an important financial commitment with us…so we have an obligation to reward that commitment…”
In announcing the premium price guarantee MLC Life stated that it was aimed at creating certainty for financial advisers and retail customers at a time when life insurance policies were increasing across the market.
MLC Life Insurance Chief Customer Officer of Retail Advised Insurance, Melissa Heyhoe said the step reinforced MLC Life’s commitment to providing life insurance products at a competitive price.
“We are proud of the fact we’ve been able to keep premiums low against our competitors in recent times, and we are confident we can hold our premium rates for all cover types at the current levels in future,” Heyhoe said.
“Our retail customers make an important financial commitment with us when they purchase one of our policies, so we have an obligation to reward that commitment by making them as affordable as we can,” she added.
Heyhoe said the announcement of the premium freeze has followed a series of deliberate actions by MLC Life Insurance to enhance services and products, including the introduction of the UnderwriteMe engine and improvements to its Best Doctor’s service.
“The pricing halt is the next step in our journey to provide certainty to consumers and advisers around pricing, so they can be confident in MLC Life Insurance as an insurance provider,” Heyhoe said.
MLC has produced a Supplementary PDS with further details of the pricing halt.
Congratulations MLC and thank you for providing this certainty to advisers.
The risk to our practice going forward has reduced dramatically, as the number one cause of lapses, are premium rises.
Clients can not and will not accept high premium increases, as quite simply, they cannot afford them, due to low wages growth, higher living expenses and higher levels of debt across the board.
All the Life Companies need to take note, that advisers will only support those Companies who have taken the same or similar measures that MLC has just taken.
In other words, if you do not guarantee a 2 year premium freeze, you will not get anymore Business going forward.
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