Useful tools for your existing Tailored Protection SMSF Plan clients
Priority Protection
A selection of cover options to cater for a broad range of insurance needs.
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{{label}}25 October 2017
From 1 January 2018, the new Life Insurance Framework (LIF) remuneration rules will be implemented across the industry.
Below is the first in our series of updates on the new LIF rules and how it relates to your experience with AIA Australia and Priority Protection and Priority Protection for Platform Investors – watch out for further details in upcoming Adviser News over the next few weeks.
Remuneration paid on level commission will not be impacted by the LIF changes:
The maximum allowable commission will be adjusted in line with the LIF rules. Commission is payable on the total annual premium excluding any policy fees, premium frequency charges, Government stamp duty and the AIA Vitality Contribution Fee (if applicable).
DATE | MAXIMUM UPFRONT | MAXIMUM ONGOING |
---|---|---|
From 1 January 2018 | 88% (incl. GST) | 22% (incl. GST) |
From 1 January 2019 | 77% (incl. GST) | 22% (incl. GST) |
From 1 January 2020 | 66% (incl. GST) | 22% (incl. GST) |
The AIA Vitality Activation Payment is not impacted by the LIF remuneration rules. AIA Australia will continue to pay $250 when AIA Vitality is added to a Priority Protection policy (subject to approval from your licensee).
Below is an outline of AIA Australia’s approach to grandfathering under the LIF rules.
Policies issued prior to 1 January 2018:
Policies issued prior to 1 January 2018 will be grandfathered for LIF purposes.
Policies issued after 1 January 2018:
Policies issued after 1 January 2018 will be grandfathered for LIF purposes if:
AND
All commission paid on grandfathered policies (including commission paid on alterations or additions) will:
There will be a two year clawback period for all policies not grandfathered. This clawback period applies to any commission paid on the original sum insured and any additions made in the first two years.
Any commission paid on additions to a policy after the two year clawback period has ended will be subject to our existing 12 month clawback rules.
Upfront commission clawbacks
Within the first 12 months | 100% |
After the first 12 months (between 13-24 months) | 60% |