A new home duties income protection option and new incentives tailored towards both white and blue collar workers are among some of the income protection enhancements introduced to BT’s insurance offering.

Launched 19 March 2012, the changes come as BT launched their new ‘BT Reserve’ insurance plan for high net-worth clients, offering income protection cover of up to $60,000 per month.

Some of the major income protection insurance policy enhancements for 2012 include:

• Benefit period options extended to age 70 for white collar workers – with monthly benefits not automatically reduced on your clients 65th birthday.
• Business Expenses Insurance is now available for ‘C’ rated blue collar workers.

New Home Duties Income Protection Option

Catered toward homemakers, this option provides you with monthly living expense insurance for those unable to perform normal household duties, providing a maximum benefit of $5,000 per month for up to 2 years.

The Home Duties Protection cover can provide you with the following benefits:

• Severe Disability Benefit – you will receive a monthly benefit if you are severely disabled and unable to perform all household duties after the waiting period because of sickness or injury.
• Recurrent Disability Benefit – allows the waiting period to be waived if you become disabled within a certain period of time due to the same sickness or injury.
• Death Benefit – pays you a benefit if you die while you are receiving monthly benefit payments.
• Extended Cover Benefit – allows your cover to continue after the policy ends on a general cover income protection definition to age 80.
• Crisis Benefit – pays you a monthly benefit for six months if you suffer a specified crisis event, regardless if you are able to perform normal household duties.

New Own Occupation Income Protection Option

Available for most employed individuals, this new form of cover provides protection if you are unable to perform your ‘Own’ occupation on a duties, time, or earnings basis. For white collar individuals, this option provides a maximum benefit period to age 70, with options to continue cover after the age of 70.

New General Cover Income Protection Option

Provides monthly living expense cover for those who are currently not working, or those in an occupation that would have previously precluded them from obtaining this type of cover. This option provides a benefit if you are unable to perform activities of daily living for a maximum benefit period to age 80, and a maximum benefit of $5,000 per month for those who are not working or unable to access cover under an ‘Own Occupation’ definition. The maximum entry age has also been increased to age 70 next birth day.

Other Enhancements:

• New Endorsed Agreed Value option – requires the insured to provide full financial information at application (even if they are applying for benefits below the existing mandatory limits). The endorsement on the policy schedule removes the need to supply financial evidence at claim time.
• Waiting Period Requirements eased – there is no longer the requirement for the insured to be Totally Disabled during the waiting period in order to receive a Total Disability or Partial Disability payment. Applies only to occupation categories AA, A, P, S, BB, B, and C.
• Superannuation Contribution option – an additional 5 per cent of pre-disability monthly earnings may be covered if your client contributes at least 5 per cent of their earnings to superannuation.
• From 1 October 2012, the minimum CPI increase will move to 3 per cent for Income Protection (Own Occupation) and Business Overheads policies.
• New Return to Work Benefit – only available with the Income Protection Plus policy, this benefit is paid when the insured returns to work following a period on-claim and have also received the Rehabilitation Expense Benefit or the Rehabilitation Program Benefit.
• No mandatory medicals for sums insured up to $10,000 per month. For sums insured up to $20,000 per month, only MBA20 and QCHECK will be required.
• Needlestick Benefit cover has been increased from $500,000 to $1 million.
• Updated Occupation listing for mining, oil, and gas workers – with significant occupation upgrades for those working less than 40 per cent of their time underground or offshore.

Asteron has announced a series of changes to its income protection cover for 2012 with its new ‘Asteron Life Complete’ policy, including a 3 tier disability definition, several built in ‘back to work’ benefits, and definition improvements.

Launching 5 March, ‘Asteron Life Complete’ will replace the current ‘Asteron Lifeguard’ insurance policy portfolio, introducing three new income protection options:

• Income Protection Standard
• Income Protection Plus
• Income Protection Accident Insurance Only Cover

The main income protection changes to be introduced with these latest enhancements include:

3 Tier Disability definition

Applying to all occupation classes, this revised definition gives the insured a greater opportunity to claim. The insured will be entitled to their full benefit if they are sick or injured, and on the advice of a registered doctor are:

Tier 1:

• Not working for more than 10 hours per week in your usual occupation or gainful occupation, and
• Unable to perform the important income producing duties of your usual occupation

OR

Tier 2:

• Not working in any gainful occupation, and
• Unable to perform one or more of the important income producing duties of your occupation

OR

Tier 3:

• Not working in any gainful occupation, and
• Unable to generate more than 20 per cent of your monthly income

New Income Protection Policy Built-in Benefits

Included as standard in all three aforementioned options, the improved built-in benefits include:

• Rehabilitation Benefit: provides those returning to work a reimbursement of any retraining or rehabilitation expenses. The insured can be reimbursed up to 12 times their Total Monthly Benefit, with reimbursement commencing on the first day the insured meets the terms of their benefit.

• Return to Business/Work Benefit: If the insured is self employed and has been on claim for 6 months, they will be entitled to 1 extra monthly benefit (up to $20,000) to help augment their income while they get back on their feet.

• Needlestick and Medical Hazards Benefit: If the insured is classified as a Medical Professional, they will be entitled to 50 times their Total Monthly Benefit (up to a maximum of $1,000,000) if, as a result of their occupational duties, they are diagnosed with: HIV; or, Hepatitis B or C.

New Built-in Benefits for Income Protection Plus

• Business Rehabilitation: If the insured is disabled and self employed, this pays 3 times the sum insured (up to $10,000) for the cost of a business coach to get their business structured in the right way to cater for their disability.

Updates on Day 1 Accident Definition to a true Day 1 meaning

If totally disabled for more than three days due to an accident, payment of your benefit will begin and will be backdated to the first day of disability.

Flexible Policy Linking

What is essentially a catch up update, this enhancement allows the insured to take advantage of bundled policy rates on Life Insurance / TPD (Total or Partial Disability) / Trauma Insurance cover, however giving you the option to split the ownership between super and self owned.

Zurich has revealed its latest policy enhancements for 2012, including a review of their occupational ratings, increased flexibility for income replacement, and a new ‘Superlink’ total and permanent disablement (TPD) feature.

The enhancements, to be available from 1 March, build from those introduced in October 2011, which included the elimination of compulsory PMAR’s for death cover up to $5M, TPD cover up to $3M and income replacement cover up to $15,000 per month, for all ages.

Some of the major enhancements targeting income protection insurance for 2012 include:

• Review of Occupation Ratings: expansion and re-rating of many occupations, including recognition of a broader range of qualifications as well as lower premiums for occupations with improved ratings.

• More flexibility for Income Protection Policies: Pre-disability income for indemnity based cover will be based on best 12 consecutive months in two years prior to claim (rather than most recent 12 months).

• Zurich now offer clients the ability to reduce their original monthly benefit on their income protection by up to 75 per cent for up to 2 years when they go on maternity or paternity leave. If they choose to reduce their benefit, the client is then given the option of reinstating their original monthly benefit without any medical underwriting.

• Business Expenses minimum sum reduced: allowing cover for more sole traders with lower expense needs.

• Increased access to Future Insurability option: allowing annual increases gives better protection to businesses recording strong growth and those individuals who experience rapid income growth.

• Improved Spouse Cover: optional benefit of $2,000 per month to cover spouse providing home support.

Other policy updates include:

• Trauma repricing: adjustments to linked and unlinked trauma rates and a reduction in the cost of trauma reinstatement option.

• Expansion to Child Trauma Cover: will allow cover to be issued with a health exclusion, where possible.

• All Wealth Protection & ZSP optional protection benefits: loyalty discounts for 3 or more policies increased from 5 per cent to 7.5 per cent

• Financial planning benefit increased from $1000 to $3000

• Revised definition of Heart Attack: reflects the changes in international diagnostic techniques relating to heart attacks. The definition also includes a future-proofing clause aimed at pre-empting any future changes to diagnostic techniques.

• Introduction of a ‘Superlink’ TPD feature: allows clients to differentiate between ‘own’ and ‘any’ inside and outside super, allowing for the purchase of occupation TPD without a double up on premium.