AIA Australia has released an update to its flagship Priority Protection range, effective 12th June 2022, in which many of the key changes relate to the insurer’s Income Protection CORE product offer. The key changes within IP Core include:
Increase in First Income Tier
- Amendment to income tiering information to reflect increase in the initial income tier from $200,000 to $240,000.
Amendment of Offset wording
- Income offset now applies to any payments received from other income protection type policies irrespective of whether they were disclosed at time of application. Other Income Protection type policies include Individual or Group Income Replacement policies, salary continuance or mortgage repayment cover.
- Under the previous definition, offsets were applied to any payments received from another insurance policy, or from a superannuation/pension plan that was not disclosed at initial or increase application.
- Definitions for Total Disability (not actively employed), Partial Disability (not actively employed) and Total Disability for Income Protection Core have been simplified.
Partial Disability Definition
- Reference to “Material and Substantial Duties” removed and replaced with “Reduced Capacity” wording. Reduced capacity means “less than your capability (having regard to your injury or sickness)”.
- Previous wording: “In the first 24 months of your Benefit Period that, you are: solely due to Injury or Sickness, unable to perform some of the Material and Substantial Duties of your Own Occupation (Income Protection CORE)”
- New wording: In the first 24 months of your Benefit Period that you are working, or capable of working, (whether paid or unpaid) and, solely as a result of Injury or Sickness: only capable of working in your Own Occupation (Income Protection CORE) in a reduced capacity
- There has also been a minor restructure in this section of the new to reflect separate terms for 5-year benefit periods.
Change to Waiting Period
- Minor wording change to clarify intent around when the waiting period commences.
Change to General Terms and Conditions
- Removal of content regarding lost or destroyed policy documentation.
Click here to access more details on these and other changes that have been outlined in a 20-page “Summary of Changes – for Advisers” document provided by AIA Australia.
…And click here or on the image below to access AIA Australia’s updated 12th June 2022 Priority Protection PDS.
Advisers can also visit the AIA Australia website for more information by clicking here.
(AIA Australia has prepared a Target Market Determination which describes the class of consumers that comprise the target market for this product. The Target Market Determination can be sourced here)