News that AIA Australia is streamlining insurance administration for advisers moving their clients’ super to a platform account attracted strong reader interest this week…
AIA Australia is streamlining insurance administration for advisers and their clients when moving super into a platform account thanks to its new Insurance Short Form Underwriting initiative.
The firm’s Chief Retail Distribution and Advice Officer Pina Sciarrone said it will enable advisers to transfer an eligible client’s group insurance cover to an AIA Priority Protection for Platform Investors Retail contract, subject to limits.
Among the conditions are that clients must be under age 55 at the time of application, and have existing life, TPD, and income protection cover in place. In addition there’s a sum insured cap of $350,000 for Life/TPD and $5,000 per month for income protection.
…risks default cover automatically being cancelled if an account is considered inactive…
The initiative, said Sciarrone, is designed to overcome barriers faced by advisers and clients whereby multiple super accounts are often retained to preserve insurance cover.
“In most cases, when an adviser is transferring a client’s superannuation into a new wrap platform structure, they retain a nominal balance in the former fund to preserve default group insurance cover,” she said.
“While this practice maintains the client’s insurance, it results in multiple super accounts and associated fees eroding balances.
“This process also often encounters administrative issues, and risks default cover automatically being cancelled if an account is considered inactive and/or the balance falls below $6,000, due to legislative reforms referred to as Protecting Your Superannuation and Putting Members’ Interests First.”
Sciarrone said the initiative enables the integration of an AIA retail policy within the destination wrap platform via a four-question personal statement.
