Managing premium changes

Help is at hand to manage your premium changes

You may have recently received a letter from AIA Australia (AIA) about premium increases to your Income Protection insurance.

We understand that this might raise some questions and concerns, and we’re here to provide you with the answers you need.

Your life insurance cover is designed to give you peace of mind, ensuring that you and your loved ones are protected should the unthinkable happen. It also provides a range of benefits and features, including access to rehabilitation support services to assist you in your recovery journey.

At AIA, we believe your insurance policy and the additional services available to you are ways to help you live a healthier, longer, better life. We’re committed to helping you make the most of your cover and enhancing your overall health and wellbeing – throughout your life, not just if you need to make claim.

On this page, you will find comprehensive information about why premium rates are changing, how to manage your insurance cover, ways to reduce your premium and who to contact should you need more information.

Frequently asked questions

We understand that increases to your premium rates can be concerning. At AIA, we want to ensure you have a clear understanding of why these changes are occurring.
Each year, like most Australian insurers, we review our premium rates to ensure our products remain sustainable. During this year’s review process, we identified an increase in the cost of providing insurance and have made the decision to increase some of our premium rates*. This is so we can continue to help our customers in their time of need.
In 2022, our customers received more than $269.6 million in Income Protection claim payments. That’s over $5.1 million in claims paid on average each week. Over the years, our Income Protection cover has helped many Australians through sickness and injury by providing financial and rehabilitation support.
We continue to look for ways to reduce expenses, manage claims more effectively and introduce new benefits to help our customers live healthier, longer, better lives.
* A premium rate is a factor that is multiplied by the sum insured or monthly benefit to determine the premium amount.
Review of Income Protection Premiums
We have experienced a continued increase in income protection claims consistent with the wider insurance industry. One of the biggest factors is that income protection claims are continuing longer than expected. This has a material impact on the overall claims cost. Several factors are driving this but particularly a rising proportion of mental health claims, which typically have a longer than average duration.
In response to this, the industry has implemented a series of premium rate increases in recent years.
Higher lapse and inflation rates have also increased the cost of providing insurance services.
We understand this may be challenging for you in the current rising cost of living environment. Please rest assured that we’re working hard to keep your premium increases as low as possible.

The premium change shown on your letter is the increase that has been applied as a result of our premium rate* review. However, there are a number of other changes that occur on your policy each year that may also increase your premium. For example:
  • If you have Stepped premiums, your premiums generally increase each year as you get older
  • If you have indexation, your cover amount or monthly benefit increases each year to keep in line with inflationYou may have had discounts applied to your policy that have changed or come to an end 
  • Your policy may have gained access to new benefits automatically as per your PDS
  • If you have a policy based in a state where stamp duty rates have changed.
  • If you have made any changes to your policy, including changes to premium frequency.
The overall increase in your premium since last year will be a combination of all these factors.
* A premium rate is a factor that is multiplied by the sum insured or monthly benefit to determine the premium amount.

Life insurance is structured as a pool of risk, where a group of people with similar risk characteristics pay premiums into a pool, and when someone makes a claim, it is paid for by the premiums from the entire pool. Therefore, when the cost of providing insurance services increases, the cost will be spread over the entire pool. The risk characteristics that help determine the pool, and therefore premium rates, include age, gender, smoker status, occupation and premium type. For Income Protection, additional risk characteristics include benefit period and waiting period of the cover.
We will never single out one person and change the premiums of their policy alone. So, when the general cost of providing insurance service increases and there is a need to increase premium rates, the cost is shared by all policies in the pool.

The premium rate change will apply from your next policy anniversary date. You can find this date in the letter you received from us.
If any of your cover is currently awaiting reinstatement or on a premium waiver, the rate change won’t apply until the policy anniversary after your cover has been reinstated or premium waiver ends. However, the rate change will apply to any cover not currently awaiting reinstatement or on a premium waiver from your next policy anniversary.

If you’re worried about being able to afford your new premium, we highly recommend that you speak to your financial adviser in the first instance. Your financial adviser recommended that you take out insurance on the basis that it provided the best cover for your unique financial situation and personal circumstances.
Your financial adviser will be able to review your current situation, your health status and financial situation, and recommend ways to best manage your premiums while maintaining cover to suit your needs and protect you and your loved ones.
If you don’t have a financial adviser or you would like to speak to us directly about your options, please call our Customer Care Team on 1800 222 622 between 9am-5pm (AEST/AEDT), Monday to Friday, excluding public holidays or via email at

There are many ways to alter your policy to help manage premium affordability – your financial adviser can recommend which alterations may be suitable for your needs.

Some examples of alterations your financial adviser may recommend:
  • Opt out of indexation this year, so your cover amount or monthly benefit does not increase this year
  • Change your payment frequency to spread the premium cost throughout the year, although a frequency charge will be applied for monthly and quarterly frequencies which will increase premiums overall
  • Reduce your cover amount or monthly benefit
  • If you have any medical or pastime loadings that could be potentially reviewed as your health has improved, or you ceased the pastime
  • Specifically for Income Protection cover:

    • Reduce your Benefit Period
    • Increase your Waiting Period
    • Convert your Income Care Platinum or Income Care Plus to Income Care or Essential Cover (income protection for accidents only)
    • Remove extra options (such as the Accident Option or Super Continuance Option)
    • Ask us to waive payment of income protection premiums for up to six months for certain personal circumstances such as involuntary unemployment, parental leave or suffering financial hardship (as defined in the PDS)
    • If you’ve changed your occupation to a lower risk occupation you can apply for a different occupation group which would require fresh health evidence
Please speak to your financial adviser to confirm if these options are appropriate for your current circumstances, including your health status and financial situation. They may also be able to recommend ways to reduce premiums for any lump sum cover you may have.

You can reduce your cover at any time, however before you do so we strongly recommend that you speak to your financial adviser in respect of your current financial position and health status to ensure that any reduced level of cover is still suitable for your needs.
If your financial adviser recommends that you reduce your cover now, you can apply to increase it again in the future. However, to increase it later you will need to provide satisfactory health, pastime and, where appropriate, financial evidence in order to do so. Depending on the outcome of that assessment, there is a risk that you may be unable to obtain additional cover or may have to pay substantially more if you require additional cover in the future. This is why it is important to carefully consider any reductions in your cover and emphasises the need to discuss this with your financial adviser.

If your health has changed since you started your policy, we recommend you discuss this with your financial adviser before making any changes to your cover. In light of any health changes, they may propose that it is in your best interest to retain some or all of your cover. It might also mean that you may find it difficult to replace your existing cover.

We regularly review our insurance premium rates which can result in premium increases. We do this to ensure our products remain sustainable and we can continue to pay claims. As part of our commitment to maintaining sustainable and comprehensive insurance products, we will continue to review our premium rates on an annual basis. If we do increase premium rates again in the future, we will provide you with advanced notice. Our goal is to keep you informed about any changes that may affect your cover.

No. The change to your premium rates does not impact your policy terms and conditions. You remain protected, provided your premiums are up to date.

Your insurance policy has been tailored to meet your specific needs by your financial adviser, who recommended it as the most suitable product for you. By choosing to stay with AIA, you continue to enjoy peace of mind, knowing that you’re protected by one of the largest insurers in the country and have access to a range of comprehensive services and programs that help you stay healthy and support your recovery if you become sick or injured.
AIA Rehabilitation
AIA Rehabilitation is a program designed to assist people with various types of injuries and illnesses in their journey to return to the workforce and everyday life – with the help of highly experienced rehabilitation professionals.
Working collaboratively with you and your supporting medical professionals, our experienced rehabilitation team delivers a range of support services all designed to return you back to wellness, back to work and back to life.
As a customer of AIA, you receive free access to one of the largest and most experienced rehabilitation teams in the life insurance industry.

Before you decide to cancel your cover, you should consider your current health status, age and financial position as you may be unable to obtain the same cover again or may even have to pay substantially more if you require protection in the future. It’s important to note, you will not be eligible for insurance claim payments for any events or conditions that arise after your cover has ended. If you are replacing your cover with alternative cover, you should not cancel it until the replacement cover is in place. We recommend that you consult your financial adviser before cancelling your policy. Your financial adviser can help you understand the financial implications of cancelling your policy and how it may impact you and your family’s circumstances.

We highly recommend that you speak to your financial adviser in the first instance.
If you don’t have a financial adviser or you would like to speak to us directly about your options, please call our Customer Care Team on 1800 222 622 between 9am-5pm (AEST/AEDT), Monday to Friday, excluding public holidays or via email at

BYour financial adviser’s details should be included on the letter you received recently about your premium rate change. Their contact details also appear on your policy anniversary letter, which you will receive separately.
If you don’t have a Financial Adviser and need help finding one, contact our Customer Care Team on 1800 222 622, between 9am-5pm (AEST/AEDT), Monday to Friday excluding public holidays and we’ll be happy to put you in touch with one.

In 2022 alone, AIA paid out a substantial amount of $269.6 million in Income Protection claim payments. That amounts to an average of over $5.1 million per week, highlighting our commitment to supporting our valued customers during their time of need.
At AIA, we believe that trust is everything when it comes to insurance. So, when you find yourself in a situation where you need to make a claim, you can rely on us as leaders to support you - and for our 3.8 million customers, that means delivering personalised support when they need it most. Whether it’s paying claims or providing access to services such as our rehabilitation program, we strive to make a significant difference in the lives of those who put their trust in us. Our goal is to help our customers enjoy healthier, longer, better lives.

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