Key dates
27 September 2021
New Income Protection products on sale
1 October 2022
Term limit for new IDII policies - ON HOLD
Introducing Zurich Income Safeguard
We will soon see a significant refresh of income protection offerings across the market, in line with APRA requirements.
At Zurich, we have viewed the requirements as an opportunity to revisit the core customer needs - and adviser challenges - in this vital category. As a result, we’ve gone back to the drawing board to design a new suite of products, making income protection easier to understand and afford, and ultimately offering more certainty for the future.
And for advisers, that means protecting your client’s biggest asset - their income - with even more confidence.
Please download the fact sheet which highlights some important changes.
Zurich Income Safeguard Fact Sheet
1000 KB,
pdf
Please download our new product information.
Zurich Income Safeguard Brochure
3 MB,
pdf
Get prepared with the 27 September transition rules
About the changes
Following the intervention to improve the sustainability of IDII (income protection) contracts - which has already seen the removal of agreed value contracts - APRA has mandated further measures which will apply to Zurich new income protection policies sold on or after 27 September 2021. These changes impact the assessment of income at claim time, replacement ratios and contract terms.
From 27 September 2021
- ‘Income at risk’ for policyholders with stable incomes is their income at time of claim and not more than 12 months old
- ‘Income at risk’ for policyholders with variable incomes will be based on average earnings 24 months prior
- Replacement ratios cannot exceed 90 per cent of earnings at time of claim for the first six months of the claim and cannot exceed 70 per cent of earnings thereafter.
From 1 October 2022
- The policy contract term cannot exceed five years, and at the end of 5 years policy holders must be offered the income protection on sale at that time.
Note that this does not mean that the longest benefit period available will be restricted to 5 years.
What it means for you – A new era with new products
In line with these changes, you will see new income protection offerings from 27 September this year.
These products will usher in a new era of certainty, stability, and sustainability in income protection products. More importantly, they will continue to excel at meeting the core customer need - for cover which protects them when they are temporarily unable to work (or unable to work at full capacity) and earn an income, and which supports them in their return-to-work journey.
More details on our new offerings will be provided soon. In the meantime, we have provided some helpful resources below.
Supporting you and your clients through this transition
Our product design focus is getting back to the primary purpose of Income Protection. As industry leaders, we believe that future IP products must:
- Pay claims – because at the end of the day – that’s what we are here to do
- Support your clients for the period of time they lose some/all of their income due to illness and injury
- Support your clients during their recovery back to health
- Support your clients to return to the life they love, and their work
- Give more premium stability – therefore you can have more confident conversations with your existing and future clients.
Expert view on the IDII changes
_ZONE Education – Watch our “Ask the experts” IDII Series below:
Key dates
27 September 2021
New Income Protection products on sale
1 October 2022
Term limit for new IDII policies - ON HOLD