MLC has announced further details designed to bring together the base premium rates for its various series of Protectionfirst policies.
This move reflects MLC’s intention to retain its long term strategy to maintain its ‘one policy series’ and upgrade philosophy.
There will be both increases and decreases to base rates for those (formerly Aviva) Protectionfirst policies administered on the MLC Eclipse system commenced after February 2002.
Base premium changes will also vary depending on the policy type, where just under 40% of lump sum policies will experience a change, the majority of those being premium decreases. Around 60% of lump sum policies will not be affected.
Income protection policies involved in the realignment will generally see increases. Most IP rate increases will be between 0% and 5%, while a small proportion of contracts will experience a 10% increase.
According to MLC, these changes are designed to more closely align the premium rates of older series of Protectionfirst policies with those applying to the current series.
News of this realignment of base premium rates follows last week’s announcement that MLC will be expanding its Best Doctors advice service to former Aviva Protectionfirst policy holders with policies administered under the Eclipse system (see: MLC Extends Best Doctors to Protectionfirst). However, MLC has made it clear that its premium realignment initiative is entirely unrelated to the expansion of its Best Doctors initiative.
MLC advises these premium changes will take effect from 22 March 2011. Those policy holders that will be impacted by the changes will be notified from 14 December, in order to ensure a three-month period of notice.
Advisers will be receiving a list of each of their clients whose policies will be subject to an increase or decrease. If the policy is not included in the adviser listing its base premium will not change.
These changes will be in addition to any normal age-based or CPI increases that will still occur and will apply to policies on both a stepped and level premium basis.
