CommInsure IP Indemnity Benefit Initiative

CommInsure has introduced a temporary change to the way it will calculate monthly benefits under its indemnity income protection policies, in order to reflect what it refers to as the unique circumstances created by the Covid-19 pandemic.

In a message to advisers last week, the insurance brand says it is temporarily modifying the Pre Disability Income definition for its IP indemnity contracts where, for a limited time, the monthly benefit for eligible customers will be calculated by using the greater of the claimant’s average monthly income for:

• The 12 consecutive months immediately preceding the commencement of disablement, or:
• The latest financial year immediately preceding the commencement of disablement

Under its standard definitions, CommInsure clients holding an indemnity policy would normally have their total or partial monthly disability benefit based on the lesser of:

• The sum insured (including any indexation increases) or:
• 75 per cent of the average monthly income in the 12 months before the claim

CommInsure notes this is a temporary change and is available for claimable events that occur from 11 March 2020 until 27 September 2020, where the claimant’s income has reduced as a result of Covid-19.

It says the temporary change only applies to CommInsure’s indemnity policies. It does not extend to its extended indemnity, agreed value or guaranteed agreed value contracts, nor will it apply to customers’ policies that commenced before 1 July 1997.

The rationale provided to advisers from CommInsure notes customers who claim on their indemnity income protection policy might be adversely affected if they have been temporarily or permanently stood down by their employer as a result of the COVID-19 pandemic, and that this temporary relief will protect their potential pre-disability income in anticipation of their return to work in the future.

CommInsure advises customers will also be notified directly about this change.