MLC has announced an industry first in its move to change the default in its quotation software from stepped to level premium.
Applicable to MLC’s flagship Personal Protection Portfolio range as well as its Life Cover Super product options, the level premium default has been implemented into the most recent version of the company’s Adviser Switchboard quotation platform.
This is MLC’s latest initiative in its drive to position level premium insurance business as a solution that best reflects the intended long-term nature of insurance plans (where appropriate), so that cover is available when most needed.
It follows another level premium ‘first’ for MLC in October 2008 when it announced it would guarantee level premium rates for five years for new and existing clients on Life cover and TPD extension business (see: MLC Rates Guarantee).
We know that in the long-run level premium is better for clients…
MLC’s Head of Product-Insurance, Sean McCormack, said “Level premiums are an important tool for advisers to use with their clients to make insurance more affordable and assist with retaining cover for the long-term.” Mr McCormack added, “We know that in the long-run level premium is better for clients which is why we changed the quoting software.”
The company has released statistics that indicate substantially greater take-up of its level insurance premium option since March 2007, particularly within the superannuation environment.
Plan For Life March 2009 data indicates that MLC’s current and new business books hold a significantly higher proportion of level versus stepped premium within income protection products than any other insurer, and that it is amongst the leaders in this statistic for lump sum products.
The question of the merits and value of stepped versus level premium has been partially addressed in a Riskinfo poll earlier this year:
Latest Poll: Stepped Versus Level/Hybrid Premium
Poll Results: Level & Hybrid Premium in Favour
Riskinfo will return to the debate on the relative merits of stepped versus level premium in future stories and polls.
