AIA Australia's new PDS effective 1 April 2020

Income protection changes

With APRA’s intervention in the individual disability income insurance (DII) market coming into effect from 1 April 2020, we have made changes to Agreed Value benefits, which include the closure of Priority Protection IP Essentials and Incorporated Business Expenses.

For any insurance applications that include an Agreed Value benefit, submitted prior to 1 April 2020, and currently being assessed, you have until 30 June 2020 to finalise all requirements and have the policy issued. If the policy is not issued by 30 June 2020, the Agreed Value benefits will no longer be available for that application.

You will continue to be able to cancel and replace any existing IP Agreed Value policies going forward, provided it is required to facilitate a change of ownership or to correct administrative errors only.

Cancel and Replacement changes

As of 1 April 2020, AIAA are changing the way we process cancel and replace requests for Agreed Value Income Protection. When you complete a quote you will be required to tick a box stating that the quote is for an Agreed Value policy which is being cancelled and replaced.

The change will mean that the application cannot be completed via eApp and you will be required to submit the quote and paper application form to AIAA via mail. The quote can still be created on eApp but must be printed and attached to the paper application.

We understand that affordability is important to you and your clients.

Below is an outline of the various discounts that could apply to your clients’ Priority Protection Lump Sum, Income Protection and Business Expenses policies.

Bundled Discounts – save up to 12.5%

If your client has both Lump Sum and IP plans with AIAA, they may be eligible to receive a 12.5% discount on their Lump Sum premiums.

If your clients Policy includes:

• one or more ‘Required Income Protection Plans', (as described in the table below) with a total combined premium for all ‘Required Income Protection Plans’ of $700¹ or more per year, and
• one or more ‘Eligible Lump Sum Plans’ (as described in the table below) with a total combined premium for all ‘Eligible Lump Sum Plans’ of $700¹ or more per year,

then the Eligible Lump Sum Plan(s) premium will receive the Bundled Discount of 12.5%.

¹ Excluding Stamp Duty, Policy Fee, AIA Vitality Contribution Fee, AIA Vitality Discount, Health and Life discount and Term Level loyalty discounts.

AIA Health Insurance – save 5%

AIA Health Insurance (previously myOwn health insurance) is AIA’s health insurance option to increase your clients’ coverage providing them with greater options. If your client is insured under an AIA Health Insurance or myOwn policy, their Priority Protection premium (exclusive of stamp duty, premium frequency charge, health loadings and policy fee) may be discounted by 5% as long as AIA Vitality remains attached to the AIA Health Insurance or myOwn policy.

AIA Vitality – up to 20% discount

AIA Vitality is our science-backed health and wellbeing program that helps clients to improve their health, and rewards them for it.

Having, and actively engaging in, AIA Vitality can see your clients reach up to 20% discount on their lump sum, IP and Business Expenses premiums. What’s great is that your client will automatically receive a 17.5% discount on their new lump sum premiums and a 7.5% discount on their IP and Business Expenses premiums.

In addition to the discounts, your clients can earn up to $500 in retail shopping vouchers each membership year. The vouchers can be used across a range of our Shopping Rewards partners including Woolworths, Myer and rebel. Members can also earn $5 a week in Active Benefits rewards.

Members earn AIA Vitality Points by learning about and improving their current state of health in areas such as nutrition, exercise and mental wellbeing.

Earning Points also contributes to a member’s AIA Vitality Status (Bronze, Silver, Gold and Platinum). A member’s AIA Vitality Status determines the level of discount a member is able to receive on some of AIA Vitality’s rewards including insurance premiums, cashback on eligible flights and endota spa vouchers.

Discounts Overview

In total, your clients’ Priority Protection policies could receive:

• 12.5% discount from bundling policies
• 17.5% discount initially for new lump sum policies taken out with AIA Vitality
  • Depending on engagement levels with AIA Vitality, this could increase to 20% or decrease over time to 0%
• 7.5% discount initially for new IP and Business Expenses policies taken out with AIA Vitality
  • Depending on engagement levels with AIA Vitality, this could increase to 20% or decrease over time to 0%
• 5% discount when the life insured also has an AIA Health Insurance or a myOwn health insurance policy
• Initial Selection Discount (ISD) of 10% in year 1 and 5% in year 2 for benefits on stepped premium. 
  • Note: this will decrease to 0% at year 3 onwards.

AIAA Priority Protection – minimum premium for AIA Vitality inclusion

From 1 April 2020, a new minimum premium applies when AIA Vitality is added to a Priority Protection or a Priority Protection for Platform Investors policy. This applies when AIA Vitality is being added to an in force policy or a new business policy and will continue to apply thereafter for Vitality membership to remain in force.

The new minimum premium is $600 per year per customer, inclusive of all discounts, loadings, policy fees and stamp duty. The $600 minimum does not include the cost of the AIA Vitality Contribution Fee. AIA will consider the combined premium for all policies for the same life insured – both in force and new business - when assessing if the minimum premium has been met.

Please note, the minimum premium for all individual policies remains at $300 inclusive of all discounts, loadings, policy fees and stamp duty.