When it comes to selecting our personal insurances such as:
- Income protection or Income Continuance
- Life insurance
- Temporary and permanent disability (TPD)
the majority of us have a “set and forget” mindset.
That is, we go to the trouble of completing the multipage application booklet and we attend to the necessary health and blood test etc. However, once the insurance application is approved, the premiums are generally direct debited from our bank account or superannuation account. In our experience rarely do people review their policy.
It has now been reported that one of the large Industry funds, Hostplus, has increased its income protection premiums by a massive 73%.
Income protection (or income continuance) is an insurance policy where you insure your income against an illness or an accident. We have been doing this for years. It’s a very sensible idea particularly where we have ongoing commitments such as rent, a mortgage, children living at home, personal loan commitments, school fees etc
As we get older we would expect the cost of such a policy to increase, but not by 73%, and not in these COVID-19 times where we have an increased risk of illness and the risk of an extended period off work.
To make the circumstances worse, Hostplus mainly caters for people employed in the hospitality, sport and tourism industries – the very industries that are placed at risk during COVID-19.
Simply put, you have 3 options:
- pay the 73% increase so you remain covered
- cancel the policy, save on the premium, but have no cover
- shop around for a more competitive quote
Cleary option 3 is the best option but this process can take some time. It is critically important to commence this review process as soon as possible, as it is our understanding that superannuation funds, such as Hostplus, are looking to increase their premiums from 1 October 2020.
Should you require more information regarding Personal Insurances such as income protection, please submit an online enquiry now or call Peter Quinn on +61 2 9580 9166. We also offer a FREE 45-minute consultation should you have other financial planning, taxation or superannuation issues you may wish to discuss.
The information in this document does not take into account your personal objectives, financial situation or needs, and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.