When it comes to altering your insurance policy, you have two clear paths to choose from.
- A Self-Directed Change (No Advice Fee): If you already know exactly what you want to do (e.g., “I need to reduce my Life cover by $200,000”), you can simply give us an instruction. We will process this for you with no advice fee.
- A Personal Advice Review (A Paid Service): If you’re unsure what you need, want to compare new insurers, or would like a formal recommendation, you can engage us for a personal advice review.
This page explains both options in detail, starting with the self-directed path.
How to Make a Self-Directed Change
If you have an existing policy with us, the process is simple.
You can send an email with your requests (e.g., “Please quote me on reducing my TPD cover to $500,000 and also on increasing my income protection waiting period to 90 days”). We can order alteration quotes for you, even for multiple scenarios.
That way you can see the premium differences and, to enforce the change, you simply need to send us a signed letter or email with your final request.
Option 1: Self-Directed Changes (No Advice Fee)
With this option, we are happy to take your instruction and complete the alterations on your behalf. It’s worthwhile to note that when you provide us instructions, we are not providing you with advice.
Common self-directed alterations include:
- Reducing your sums insured. (If increasing the sum insured, you may need to go through underwriting, but there may be ways to increase your coverage at your policy anniversary without this).
- Increasing the waiting period or reducing the benefit period on your income protection.
- Updating the beneficiaries on your Life insurance.
- Administrative changes (address, payment details, phone numbers, etc.).
Below are some things to consider when thinking about self-directed changes.
Things to Consider for Income Protection
Generally, there are three things you can elect to alter with your income protection which influence the premium.
- Waiting Period: The options are typically 30, 60 or 90 days. The longer your waiting period, the cheaper the premium becomes. Obviously, the longer the waiting period, the longer you have to wait until you can receive a payment when claiming, so it’s important to think about how you and your family would cope over this period with no income
- Benefit period: Generally, you can have a 5-year benefit period or a benefit payable to age 65. Again, a shorter benefit period (5yrs) means a cheaper premium because the insurer would be paying a benefit for a shorter period of time. It’s important to think about what you would do for an income after the benefit period expires if considering a 5-year period.
- The monthly benefit (sum insured): This is how much the insurer pays you in the event of a claim. The lower the monthly benefit the lower the premium, but it’s important to remember that this is taxable like a regular income, so make sure you can cover your costs of living after paying tax.
Generally, most income protection policies obtained prior to October 2021 cover 75% of your gross income. These policies are generally better quality than those obtained after October 2021, which will generally cover 60-70% of your gross income. Read this article to know more about the difference. Link: Differences in income protection policies
Things to Consider for Life & TPD Cover
Think about the impact if you were to die or if you were permanently disabled and unable to work again (TPD). In this case, things to consider when determining your sums insured are:
- Payout your debts: Make sure to pay out your mortgage, personal loans, credit cards, etc.
- Cover your final costs: It costs money to die. Cover your funeral expenses, legal/estate planning expenses, and any medical costs. We generally use an amount between $30,000-$50,000 for this.
- Consider covering your children’s education expenses: These costs can certainly add up if going to private schools or university.
- Create a lump sum of capital to fund your living expenses: For TPD, you may only receive 60-75% of your income from Income Protection, so you’ll likely need extra funds to cover your costs of living and ongoing medical expenses.
To get a clear idea of how much cover you might need, you can use our online calculator here:
Things to Consider for Trauma (Critical illness) insurance
This cover is paid on diagnosis of a critical illness (like cancer, heart attack, or stroke). It’s designed to help cover medical costs, access treatments not covered by Medicare, and cover any debt repayments.
One of the most important things to consider is the impact on your spouse if they need to reduce their work hours to help with your care. To calculate the sums insured, we generally consider:
- Covering medical and treatment costs of up to $100,000 to $200,000.
- Helping to cover any short-term debt repayments to take the burden off the family.
- Covering 50%-100% of your spouse’s income for 2 years, so they can work part-time or not at all to focus on your recovery.
Option 2: Personal Advice Review (A Paid Service)
If you are unsure what you need to alter or would like to complete an in-depth policy review, we can do that too. As this option requires us to provide you with personal advice, we would charge a fee to cover our time.
Generally, an in-depth review would compare the price, policy features, definitions, and structure to other insurers on the market, all while taking into account your current circumstances (financial, personal, and medical).
This process can take time, but at the end, we will have recommended the best insurer for you. This way you have peace of mind that your cover is working efficiently and that you and your family are protected.
It is also worthwhile noting that changing insurers will require you to complete a new application and go through underwriting (a health assessment). If you have had any changes in health, an insurer may exclude these conditions or increase your premiums (a loading). Rest assured we can guide you through this process.
A Final, Critical Warning: Know What You’re Giving Up
When we review your options, we consider what features you may gain but, more importantly, what features you will lose.
This is critical for income protection policies set up prior to October 2021. These older policies contain generous definitions and features that can no longer be purchased today.
A cheaper policy from a new insurer may look appealing, but it could be far less effective at claim time. It is vital to get this right.
The bottom line is if you think you need to make some changes to your cover, please get in touch!