| What can Akira do with his Lump Sum Covers | Approximate premium reduction range | What does making this change mean for Akira? |
|---|---|---|
| Change payment frequency from monthly to annual | 6% | Paying premiums annually is cheaper than paying monthly. But it also means Akira would have to pay each year's premium upfront, which could affect his cashflow. |
Find out how you can make insurance more affordable
These two customers recognise the value of insurance and understand how vital it is to financial security. However, cost of living pressures are a concern. Explore how they can make insurance more affordable.
Meet Akira...
| Age Occupation |
45 Clergyperson |
Meet Lisa...
| Age Occupation |
40 Councillor |
Meet Akira
Akira is married. His wife Naomi, recently gave birth to their third child. Naomi is planning to take extended maternity leave to look after their 5 and 3 year old, and the new born.
Akira’s salary is adequate for the family to live on, however cost of living pressures are creating some financial stress for the couple. They are reviewing their budget for places to save a few dollars.
Akira has multiple life insurance policies. He recognises the value of insurance and understands how vital it is for his families financial security and wellbeing. He also knows how crucial it is in the current economic environment.
Akira wants to keep his insurance, but is looking for a way to reduce his premium.
- Policy details
- Affordability options
| Gender | Male |
|---|---|
| Smoker Status | Smoker |
| State | ACT |
| Age next birthday | 45 |
| Occupation | Clergyperson |
| Cover | Non Super |
| Premium frequency | Monthly |
| Premium type | Stepped |
| Term | $1,250,000 |
|---|---|
| TPD (Non Linked) | $750,000 |
| Trauma (Non Linked) | $250,000 |
| TPD definition | Own |
| Trauma level | Platinum |
| Income Protection (IP) | $8,000 |
| IP Type | Guaranteed |
| IP Benefit perod | To age 65 |
| IP waiting period | 30 days |
| IP level | Comprehensive |
Akira is considering making changes to his policy to make it more affordable, what are his options:
What can Akira do with his Lump Sum Covers
| What can Akira do with his Lump Sum Covers | Approximate premium reduction range | What does making this change mean for Akira? |
|---|---|---|
Change Trauma cover from Premier to Comprehensive |
2% | Making this change will reduce the number of conditions Akira can claim for. Comprehensive – Covers 46 trauma conditions, including two conditions for which we pay a partial benefit. Premier – Pays a full benefit on 44 trauma conditions, and a partial benefit on 16 trauma conditions. |
Reduce Sum Insured |
This will vary depending on the size of the reduction | If Akira reduces his sum insured, this will also reduce the value of the benefit Akira or his nominated beneficiaries could receive at claim time. |
| What can Akira do with his Lump Sum Covers | Approximate premium reduction range | What does making this change mean for Akira? |
|---|---|---|
| Change Occupation for TPD cover from Own to Any | 7% | After making a TPD claim, ability to work will be assessed. If Akira changed his cover to the Any Occupation definition of TPD, this assessment will based on his education, training and experience, not just the occupation Akira was in before making the claim. This means it is a broader assessment criteria for Akira to meet and be eligible for a payment. The potential premium reduction is for TPD cover only. |
| Decline CPI (Consumer Price Indexation) | Reductions will vary as you cover will still increase with age (stepped cover) | Declining CPI means Akira’s cover won't increase with inflation each year at his policy anniversary. Removing CPI permanently means his cover won't ever increase with inflation. In either case, this could impact the value of the benefit Akira or his beneficiaries are entitled to at claim time. As Akira’s policy is on a stepped premium, it means his premiums will increase with his age still – even though his level of cover won't increase. |
| Linking stand alone insurance cover | Trauma 3% TPD up to 3% |
If Akira has different types of standalone cover (such as Death, Trauma and TPD cover) he can link them together which makes the premium cheaper. This means that claiming against one part of his cover will reduce the value of the other cover by the claim payment amount. |
| Remove the Trauma Reinstatement extra cost option from Trauma cover | 3% | Removing this benefit means Akira’s Trauma cover won't be reinstated for unrelated conditions after we've paid a Trauma claim. |
| Remove the Double TPD or Trauma extra cost option from Trauma cover | Double TPD 5% Double Trauma 12% Combined 16% |
With this benefit in place Akira’s Death cover would be automatically be reinstated after a TPD or Trauma claim was paid, and the premiums on the reinstated Death cover would be waived ($0 premium). Removing this benefit means Akira’s Death cover won't be automatically reinstated after we've paid a TPD or Trauma claim. Akira will be able to buy back Life cover after 12 months but he will have to pay premiums on that bought back cover. *This option would only be available if Akira had linked cover. |
| What can Akira do with his Lump Sum Covers | Approximate premium reduction range | What does making this change mean for Akira? |
|---|---|---|
Review Policy Loadings |
This will vary depending on whether there is loading on this policy and what the loading is | If we determine that the reason for Akira’s loading no longer applies, removing this loading will reduce the cost of his premiums. This won't impact Akira’s level of cover, but he will need to go through our underwriting process to see if the loading can be removed. |
Review smoking status |
55% | If Akira has stopped smoking for over 12 months he can ask for a review of his smoking status to determine if he is eligible for non-smoking rates of cover. Akira will need to go through our underwriting process to see if the smoking rates can be removed, and if applicable this will reduce the cost of his premiums |
| What can Akira do with his Lump Sum Covers | Approximate premium reduction range | What does making this change mean for Akira? |
|---|---|---|
Premium Freeze |
Premium reduction vary depending on level of Cover, CPI and Age rate factors | If Akira chooses to freeze his premiums at the policy anniversary, the cost of his insurance cover will stay the same rather than increase with CPI and age rate factors that apply to his cover. This also means the value of Akira’s cover will decrease. |
What can Akira do with his Income Protection Cover
| What can Akira do with his Income Protection Cover | Approximate premium reduction range | What does making this change mean for Akira? |
|---|---|---|
Reduce Sum Insured |
This will vary depending on the size of the reduction | If Akira reduces his sum insured, this will also reduce the value of the benefit Akira can receive at claim time. |
| What can Akira do with his Income Protection Cover | Approximate premium reduction range | What does making this change mean for Akira? |
|---|---|---|
| Change from Guaranteed to Indemnity cover | 18% | If Akira changes his Income Protection to Indemnity cover this means that any claim would be reviewed based on Akira’s average income in the 2 years prior to the event leading to his claim, rather than the agreed value of his income when he applied for the cover. Akira’s income may havechanged since his application for cover and his claimable amount would be limited based on his more recent income. |
| Change from Comprehensive cover to Standard cover | 8% | If Akira was to move from comprehensive type cover to standard type cover it would lower the cost of his Insurance and it would mean he would no longer have features such as Trauma Recovery benefit available, but this Total Disability definition would continue to have the same definition and his requirement during the waiting period would be the same. |
| Increase Waiting Period from 30 Days to 60 days | 16% |
By increasing his waiting period from 30 days to 60 days, it means that if Akira had a payable claim he would be eligible for payment after being disabled for 60 days instead of 30 days. |
| Increase Waiting Period from 30 Days to 90 days | 39% | By increasing his waiting period from 30 days to 90 days, it means that if Akira had a payable claim he would be eligible for payment after being disabled for 90 days instead of 30 days. |
| Reduce Benefit Period from Age 65 to 2 years | 47% | If Akira was to reduce his benefit period from ‘to Age 65’ down to a 2 year benefit period, it means that the maximum period of time a monthly benefit will be paid to Akira will be 2 years, after the end of the Waiting Period. |
| Reduce Benefit Period from Age 65 to 6 years | 30% | If Akira was to reduce his benefit period from ‘to Age 65’ down to a 6 year benefit period, it means that the maximum period of time a monthly benefit will be paid to Akira will be 6 years, after the end of the Waiting Period. |
| Reduce Benefit Period from Age 65 to age 55 | 10% | If Akira was to reduce his benefit period from ‘to Age 65’ down to an age 55 benefit period, it means that the maximum period of time a monthly benefit will be paid to Akira will be through to his policy anniversary when he reaches age 55. |
| Reduce Benefit Period from Age 65 to age 60 | 4% | If Akira was to reduce his benefit period from ‘to Age 65’ down to an age 60 benefit period, it means that the maximum period of time a monthly benefit will be paid to Akira will be through to his policy anniversary when he reaches age 60. |
| Remove Premier Accident option | 11% | Removing this option means that Akira can't claim for any injury during his waiting period where he was totally disabled from injury for more than 3 consecutive days. So any claim payments he would receive will be in line with his waiting period. |
| Remove Increasing Claims extra cost option | 9% | By removing the increasing claims option on his cover it means that Akira’s cover will not increase annually with CPI while on claim. |
| What can Akira do with his Income Protection Cover | Approximate premium reduction range | What does making this change mean for Akira? |
|---|---|---|
Review Policy Loadings |
This will vary depending on whether there is a loading and what the loading is | If we determine that the reason for Akira’s loading no longer applies, removing this loading will reduce the cost of his premiums. This won't impact Akira’s level of cover, but he will need to go through our underwriting process to see if the loading can be removed. |
Review smoking status |
23% | If Akira has stopped smoking for over 12 months he can ask for a review of his smoking status to determine if he is eligible for non-smoking rates of cover. Akira will need to go through our underwriting process to see if the smoking rates can be removed, and if applicable this will reduce the cost of his premiums. |
| What can Akira do with his Income Protection Cover | Approximate premium reduction range | What does making this change mean for Akira? |
|---|---|---|
Cover Suspension |
100% during cover suspension period | As he has held the policy for more than 1 year Akira can choose to suspend his cover under this feature (if available) for up to 12 months over the life of the policy. This means that he doesn’t pay any premiums or has any insurance cover during that period of time. Also, if Akira has any health issues during that period, he won't be able to claim for them in the future. |
Meet Lisa
Lisa is a single mum, with an 8 year old daughter, Jessica. The self-confessed super-mum, busy balancing parenthood and growing her business.
Lisa’s income is adequate for duo to live on, however cost of living pressures are a real concern. She is reviewing her budget for places to save a few dollars.
Lisa has multiple life insurance policies. She recognises the value of insurance and understands how vital it is for her families financial security and wellbeing. She also knows how crucial it is in the current economic environment.
Lisa wants to keep her insurance, but is looking for a way to reduce his premium.
- Policy details
- Affordability options
| Gender | Female |
|---|---|
| Smoker Status | Smoker |
| State | ACT |
| Age next birthday | 40 |
| Occupation | Councilor |
| Cover | Non Super |
| Premium frequency | Monthly |
| Premium type | Stepped |
| Term | $1,250,000 |
| TPD (Non Linked) | $750,000 |
| Trauma (Non Linked) | $250,000 |
| TPD definition | Own |
| Trauma level | Premier |
| Income Protection (IP) | $8,000 |
| IP Type | Guaranteed |
| IP Benefit perod | To age 65 |
| IP waiting period | 30 days |
| IP level | Comprehensive |
Lisa is considering making changes to her policy to make it more affordable, what are her options:
What can Lisa do with her Lump Sum Covers
| What can Lisa do with her Lump Sum Covers | Approximate premium reduction range | What does making this change mean for Lisa? |
|---|---|---|
Change Trauma cover from Premier to Comprehensive |
6% | Making this change will reduce the number of conditions Lisa can claim for. Comprehensive – Covers 46 trauma conditions, including two conditions for which we pay a partial benefit. Premier – Pays a full benefit on 44 trauma conditions, and a partial benefit on 16 trauma conditions. |
Reduce Sum Insured |
This will vary depending on the size of the reduction | If Lisa reduces her sum insured, this will also reduce the value of the benefit Lisa or her nominated beneficiaries could receive at claim time |
| What can Lisa do with her Lump Sum Covers | Approximate premium reduction range | What does making this change mean for Lisa? |
|---|---|---|
| Change Occupation for TPD cover from Own to Any | 7% | After making a TPD claim, ability to work will be assessed. If Lisa changed her cover to the Any Occupation definition of TPD, this assessment will based on her education, training and experience, not just the occupation Lisa was in before making the claim. This means it is a broader assessment criteria for Lisa to meet and be eligible for a payment. The potential premium reduction is only for the TPD cover. |
| Premium Freeze | Reductions vary depending on level of Cover, CPI and Age rate factors | If Lisa chooses to freeze her premiums at the policy anniversary, the cost of her insurance cover will stay the same rather than increase with CPI and age rate factors that apply to her cover. This also means the value of Lisa’s cover will decrease. |
| Decline CPI (Consumer Price Indexation) | Reductions will vary as you cover will still increase with age (stepped cover) | Declining CPI means Lisa’s cover won't increase with inflation each year at her policy anniversary. Removing CPI permanently means her cover won't ever increase with inflation. In either case, this could impact the value of the benefit Lisa or her beneficiaries are entitled to at claim time. As her policy is on a stepped premium, it means Lisa’s premiums will increase with her age still – even though her level of cover won't increase. |
| Linking stand alone insurance cover | Trauma 4% TPD up to 4% |
If Lisa has different types of standalone cover (such as Death, Trauma and TPD cover) she can link them together which makes the premium cheaper. This means that claiming against one part of her cover will reduce the value of the other cover by the claim payment amount. |
| Remove the Trauma Reinstatement extra cost option from Trauma cover | 4% | Removing this benefit means Lisa’s Trauma cover won't be reinstated for unrelated conditions after we've paid a Trauma claim. |
| Remove the Double TPD or Trauma extra cost option from Trauma cover | Double TPD 4% Double Trauma 8% Combined 11% |
With this benefit in place Lisa’s Death cover would be automatically be reinstated after a TPD or Trauma claim was paid, and the premiums on the reinstated Death cover would be waived ($0 premium). Removing this benefit means her Death cover won't be automatically reinstated after we've paid a TPD or Trauma claim. Lisa will be able to buy back Life cover after 12 months but she will have to pay premiums on that bought back cover. *This option would only be available if Lisa had linked cover. |
| What can Lisa do with her Lump Sum Covers | Approximate premium reduction range | What does making this change mean for Lisa? |
|---|---|---|
Review Policy Loadings |
This will vary depending on whether there is loading on this policy and what the loading is | If we determine that the reason for Lisa’s loading no longer applies, removing this loading will reduce the cost of her premiums. This won't impact her level of cover, but she will need to go through our underwriting process to see if the loading can be removed. |
Review smoking status |
49% | If Lisa has stopped smoking for over 12 months she can ask for a review of her smoking status to determine if she is eligible for non-smoking rates of cover. Lisa will need to go through our underwriting process to see if the smoking rates can be removed, and if applicable this will reduce the cost of her premiums. |
| What can Lisa do with her Lump Sum Covers | Approximate premium reduction range | What does making this change mean for Lisa? |
|---|---|---|
Premium Freeze |
Premium reduction vary depending on level of Cover, CPI and Age rate factors | If Lisa chooses to freeze her premiums at the policy anniversary, the cost of her insurance cover will stay the same rather than increase with CPI and age rate factors that apply to his cover. This also means the value of Lisa’s cover will decrease. |
What can Lisa do with her Income Protection Cover
| What can Lisa do with her Income Protection Cover | Approximate premium reduction range | What does making this change mean for Lisa? |
|---|---|---|
Reduce Sum Insured |
This will vary depending on the size of the reduction | If she reduces her sum insured, this will also reduce the value of the benefit Lisa can receive at claim time. |
| Change from Agreed Value to Indemnity cover | 19% | If Lisa changes her Income Protection to Indemnity cover this means that any claim would be reviewed based on Lisa’s average income in the 2 years prior to the event leading to her claim, rather than the agreed value of her income when she applied for the cover. Lisa’s income may have changed since his application for cover and her claimable amount would be limited based on her more recent income. |
| Change from Comprehensive cover to Standard cover | 7% | If Lisa was to move from comprehensive type cover to standard type cover it would lower the cost of her Insurance and it would mean she would no longer have features such as Trauma Recovery benefit available, but this Total Disability definition would continue to have the same definition and her requirement during the waiting period would be the same. |
| What can Lisa do with her Income Protection Cover | Approximate premium reduction range | What does making this change mean for Lisa? |
|---|---|---|
| Increase Waiting Period from 30 Days to 60 days | 16% |
By increasing her waiting period from 30 days to 60 days, it means that if Lisa had a payable claim she would be eligible for payment after being disabled for 60 days instead of 30 days. |
| Increase Waiting Period from 30 Days to 90 days | 40% | By increasing her waiting period from 30 days to 90 days, it means that if Lisa had a payable Claim she would be eligible for payment after being disabled for 90 days instead of 30 days. |
| Reduce Benefit Period from Age 65 to 2 years | 43% | If Lisa was to reduce her benefit period from ‘to Age 65’ down to a 2 year benefit period, it means that the maximum period of time a monthly benefit will be paid to Lisa will be 2 years, after the end of the Waiting Period. |
| Reduce Benefit Period from Age 65 to 6 years | 34% | If Lisa was to reduce her benefit period from ‘to Age 65’ down to a 6 year benefit period, it means that the maximum period of time a monthly benefit will be paid to Lisa will be 6 years, after the end of the Waiting Period. |
| Reduce Benefit Period from Age 65 to age 55 | 10% | If Lisa was to reduce her benefit period from ‘to Age 65’ down to an age 55 benefit period, it means that the maximum period of time a monthly benefit will be paid to Lisa will be through to her policy anniversary when she reaches age 55. |
| Reduce Benefit Period from Age 65 to age 60 | 4% | If Lisa was to reduce his benefit period from ‘to Age 65’ down to an age 60 benefit period, it means that the maximum period of time a monthly benefit will be paid to Lisa will be through to her policy anniversary when she reaches age 60. |
| Remove Premier Accident option | 10% | Removing this option means that Lisa can't claim for any injury during her waiting period where she was totally disabled from injury for more than 3 consecutive days. So any claim payments she would receive will be in line with her waiting period. |
| Remove Increasing Claims extra cost option | 9% | By removing the increasing claims option on her cover it means that Lisa’s cover will not increase annually with CPI while on claim. |
| What can Lisa do with her Income Protection Cover | Approximate premium reduction range | What does making this change mean for Lisa? |
|---|---|---|
Review Policy Loadings |
This will vary depending on whether there is a loading and what the loading is | If we determine that the reason for Lisa’s loading no longer applies, removing this loading will reduce the cost of her premiums. This won't impact Lisa’s level of cover, but she will need to go through our underwriting process to see if the loading can be removed. |
Review smoking status |
23% | If Lisa has stopped smoking for over 12 months she can ask for a review of her smoking status to determine if she is eligible for non-smoking rates of cover. Lisa will need to go through our underwriting process to see if the smoking rates can be removed, and if applicable this will reduce the cost of her premiums. |
| What can Lisa do with her Income Protection Cover | Approximate premium reduction range | What does making this change mean for Lisa? |
|---|---|---|
Cover Suspension |
100% during cover suspension period | As she has held the policy for more than 1 year Lisa can choose to suspend her cover under this feature (if available) for up to 12 months over the life of the policy. This means that she doesn’t pay any premiums or hashave any insurance cover during that period of time. Also, if Lisa has any health issues during that period, she won't be able to claim for them in the future. |
This information is dated June 2023 and may be subject to change. This case study is for illustrative purposes only and based on the scenario described - actual policy options vary depending on the product type held and premium reductions will vary depending on the specific circumstances of each individual case. OnePath insurance products are issued by Zurich Australia Limited (Zurich, OnePath) ABN 92 000 010 195, AFL 232510. The information is a summary only and there are relevant conditions and exclusions that are explained in the Product Disclosure Statement (PDS).
This information is of a general nature and has been prepared without taking account of your objectives, financial situation or needs. Before acting on the information, you should consider whether the information is appropriate, having regard to your objectives, financial situation and needs, and consider the Product Disclosure Statement and Policy Terms (PDS) before deciding whether to acquire, or to continue to hold, the product. Please visit www.onepath.com.au for a copy of the PDS.
If you’re concerned about your premium, please talk to your financial adviser. They can work with you to see if it makes sense for you to adjust your cover.
Additionally, you can contact us. While we can’t talk to you about your personal circumstances in the same way your adviser can, we can talk to you about your policy, and the options available under your policy.
If you Need help finding an adviser?
Zurich provides a free service that can connect you to an independent financial adviser:
Financial Advice Association Australia (FAAA)
ASIC’s MoneySmart website also has valuable information on what to look for when choosing a financial adviser.
Or contact us
Call 133 667
Monday-Friday: 8.30am – 6.00pm AEST
Email: client.onepath@zurich.com.au