On 18 March 2016 we're making changes to our Income Protection (IP) insurance
These changes are detailed in the notice, Important changes to our Income Protection (IP) insurance, we recently sent you in the mail.
As outlined in this notice the cost of our IP insurance is increasing:
- Our IP insurance premium rates will increase by 53% on 18 March 2016. Here are the new rates.
- The Heavy Manual job classification factor will also increase from 2.40 to 3.20.
Other changes include:
- If you’re being paid a benefit from IP insurance and receiving Workers Compensation payments, your IP benefit payment will stop when you’re fit to return to work. Currently, they can stop when your Workers Compensation payments stop for other reasons.
- Government stamp duty we collect on IP premiums will reduce to 6.5% from 7.0%. Stamp duty is included in the cost of IP insurance.
A new PDS and Insurance Guide will be issued on 18 March 2016 which will include these changes.
Here’s an example to help you work out the cost of your IP insurance.
John is a 40 year old open-cut miner with a salary of $80,000. His IP insurance has a 60 day waiting period and a two year benefit period. To calculate his premium from 18 March 2016, John needs to complete the following steps:
Calculate John's amount of cover based on his salary of $80,000.
- $80,000 x 75% = $60,000. This is the amount to replace his income.
- $80,000 x 9.5% = $7,600. This is the amount to replace his compulsory employer super contribution.
- John's annual amount of cover is $60,000 + $7,600 = $67,600.
Find John's cost of insurance using the table of new rates. As a 40 year old male the cost of John’s IP insurance is $0.08946 per week for $1,000 of insurance.
Find John's job classification from the table below. As an open-cut miner, John's job classification is Heavy Manual and the factor is 3.20.
Here are the five job classification factors
|Professional ||White collar ||Light Manual || Heavy Manual ||Mining |
| 0.85 || 1.00 ||1.60 || 3.20 || 3.20 |
Calculate the cost of John's IP insurance
($67,600 / 1,000) x 0.08946 x 3.20 = John’s weekly premium of $19.35 which is a monthly premium of $83.86.