OnePath increases existing customer premiums
While some of the major life insurers have tried to step around further increasing premiums to existing customers, OnePath has bitten the bullet and told advisers than it will be lifting premiums effective from 14 December.
The insurer has revealed that premiums for its income protection products will increase 10% for stepped premiums and 35% for level premiums, while TPD will increase 5% for stepped premiums and 10% for level premiums and 10% for stepped premiums and 15% for level premiums.
The insurer also informed advisers that in addition to the base rate changes it would also be removing its policy fee for all policies at the same time, noting that there might be additional increases for customers who had been on a rate lock since 2019.
OnePath’s announced changes are consistent with the regime outlined by the Australian Prudential Regulation Authority (APRA) and means that for OnePath OneCare new customers, the company’s KickStart discount has been integrated into the company’s base pricing.
OnePath explained to adviser that as a result of APRA’s focus on product sustainability it would be ceasing to offer agreed value contracts, linking income at risk more closely with actual earnings at time of claim and removing benefits and features that potentially provided the ability to be financially better off on claim than when working.
TAL and ClearView also recently outlined their pricing and policy structure approaches.
There’s likely to be a lot of discussion between advisers and clients about premiums because of this. You can bet ASIC and Treasury won’t acknowledge that in their review.