Meet AIA Priority Protection client Jed, Jed age 45 works in the IT consulting space and has been with his firm for 15 years.
His adviser identified that he required income protection to protect his salary as a Director of the consulting firm. With non-deductible debt on the family balance sheet and his two children still in high school, his current levels of $1,000,000 Life and TPD cover.
His adviser has just recommended AIA Australia Income Protection CORE policy together with $150,000 of Priority Protection Standalone Crisis Recovery.
Having identified that his existing Life and TPD cover does not meet his stated goals, needs and objective, his adviser is also looking to replace his existing lump sum cover with AIA Priority Protection.
While IP CORE has a comparatively lower income replacement ratio, it does meet Jed’s objectives given he has significant liquidity and emergency funds that can be accessed to top up an IP CORE monthly insured benefit; should he become temporarily ill or injured.
The $150,000 of Crisis Recovery will counter the risk of chronic disease and illness which are prevalent at his age. This is particularly important to Jed after witnessing first-hand the devasting effects, both mentally and financially, that cancer has on a close friend.
Being standalone Crisis Recovery, it provides Jed with a comprehensive level of cover relative to what would have been available had the Crisis cover been built into a standard IP contract.
Crucially, and unlike AIA Australia’s Income Protection PLUS Optional, if he met the qualifying claim criteria under both policies, he would be paid the $150,000 sum insured on top of the monthly insured benefit payable on IP CORE.
Because Crisis Recovery must be self-owned outside of the superannuation environment, Jed was very receptive to the idea of a Five-Year Term Level Rate Guarantee structure; especially in light of persisting pricing pressures in the life insurance industry. At his age, the option of a standard Level premium structure wasn’t palatable given the large disparity between Stepped and Level premiums, and the fact that it would take an extremely long time to breakeven.
He takes comfort knowing that the annual premiums on his cover, especially the Crisis Recovery component, are absolutely fixed and guaranteed for the first five years of the policy with no surprise rate rises for the first five years.