For example, life cover rates for both sexes will increase, especially for females who generally life longer. Rates for critical illness will also increase as will income protection premiums for males. The increases here could range from 5-30% depending on the circumstances.
IP rates for females could actually fall as IP has traditionally been more expensive for females and isn’t impacted by the tax change.
• Contact clients
Inform existing and pipeline clients of the pending changes and possible implications so that anyone who needs cover, or anyone who needs to review their existing cover, has the opportunity to do so before prices start to rise.
• Act quickly
Cover needs to be in place before the cut off date (not in the process of underwriting) and so applications need to be made as quickly as possible. Likewise, even though some prices may fall in a few specific situations, it may not be advisable to delay arranging cover because a client’s personal circumstances, such as their (or their family’s) health can change at any point. Once a health issue exists it may become difficult to place cover.
• Look out for the warning signs
Speaking to a number of advisers and other industry bodies in recent weeks one of main the worries about G-day is that some providers may take on too much business and not be able to get it through in time.
If a provider’s admin starts to really slip it might be worth placing the business elsewhere just in case they cannot get the pipeline through in time before the new prices take effect. Some insurers are making noises about hiring extra staff to make sure everything gets done, but nothing can ever be completely certain.
They may not be able to ‘honour’ the original rates so keep an eye out for the warning signs as it is really hard for any company to turn off the new business tap.
How do providers vary?
In typically competitive fashion each insurer has launched a different process to the next. Some firms are accepting future start dates, some are not. Some firms are changing their pricing ahead of the cut-off date while others are not. Some insurers require the full underwriting to be received, some do not. And so on.
To help advisers F&TRC has compiled a detailed matrix of the key issues detailing where each provider stands. It was created by working with specialist protection advisers who agreed the issues they consider to be the most important for G-Day, which can be found here: http://www.adviserforum.com/forums/protection/g-day-readiness-matrix/
