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If your policy includes inflation adjustments, we automatically increase your cover each year - no medical checks or extra paperwork is required. This can help your insurance cover keep pace with the rising cost of living, based on the Consumer Price Index (CPI). As your sum insured amount increases, your premium usually does too. The inflation adjustment is an optional feature, and you can choose to either decline the increase for a year or have the feature permanently removed at any time.
How is the inflation adjustment calculated?
The inflation adjustment is determined based on the Consumer Price Index (CPI)*, which measures the cost of living against the price of a basket of goods. Whenever the average price of these goods and services goes up or down, the CPI is adjusted.
If your insurance policy includes the inflation adjustment, each year we offer you an increase to your sum insured (your level of cover). For some products, this increase is solely based on the CPI while for other products we offer the option of CPI or a fixed percentage increase to the sum insured - whichever is higher.
* As published by the ABS (Australian Bureau of Statistics) at a certain date (this date depends on your policy terms and conditions) and applied from the start of the quarter following the quarter in which the applicable CPI is published by the ABS.
Understanding inflation adjustments
If your sum insured is adjusted for inflation, you’ll receive a larger benefit if you make a claim. It’s important to note that your premiums will generally also increase if you accept the increase offer for:
• Life, TPD or Trauma cover: the inflation adjustment amount is either 5% or the increase in CPI – whichever is greater.
• Income Protection cover: the inflation adjustment amount is either 3% or the increase in CPI – whichever is greater.
For example: For Elevate Life cover, the inflation adjustment is the greater of 5% and the CPI rate, which means if the inflation rate is 3.8% then the amount we offer is 5%. Alternatively, if the CPI rate is 6.85% and our inflation adjustment offer is 5%, we’d then offer and adjustment of 6.85%.
The following are some customer examples:
| Customer A | Customer B | Customer C | |
| Decision | Accepted inflation adjustment at 1,2 and 4 year anniversaries. Opted out for 3 year anniversary. | Accepted inflation adjustment every year. | Declined inflation adjustment every year. |
| Outcome | Sum insured increases each year except in year 3 when they opted out. | Sum insured increases each year. | Sum insured remains unchanged. |
You can let your cover increase automatically or choose to keep it as it is. The choice is yours.
How do I check if my policy is adjusted for inflation?
You can check whether your policy is currently adjusted for inflation within My Resolution Life under ‘Policy Details’ or on your most recent Annual Statement.
Since this feature is optional, some people choose to accept the adjustment to ensure they have enough insurance to cover their needs, should they ever need to claim in the future. For others, they choose to decline the offer, particularly if affordability is a concern or if they no longer need as much cover.
Speak to your financial adviser
It’s a good idea to consider speaking with a financial adviser about how inflation may impact your insurance needs, to make sure you’ve considered all your options and are making the right decision based on your circumstances.
If you don’t currently have a financial adviser, you can find an adviser who can help you decide.
How do I opt out?
If you no longer want to be offered the automatic increase in your sum insured, you can also ask us to remove that feature from your policy, noting that if you wanted to add that feature back in future you will need to be apply for the increase and you may not be eligible to have it re-added.
If you want to opt out, either for one year or permanently, you can do so online:
Opt out in My Resolution Life
Login or register today then search for ‘inflation adjustment’ and follow the steps.
Opt out using our form
Fill out our online inflation adjustment form.
Common misconceptions (and what’s actually true)
Myth: My sum insured went up by 5%, so my stepped premium goes up by 5% too
Fact: The inflation adjustment increases your sum insured, which is one of the components used to calculate your premium amount.
Your premium is calculated using a combination of factors - including your age, the amount of cover, stamp duty, product structure, and the underlying premium rate tables. So even if your cover increases due to inflation adjustments (such as CPI), the cost of that additional cover may be more or less than 5%, depending on these other variables.
Myth: I’ve opted out of inflation adjustments (CPI) so my level/variable premiums won't increase
Fact: Opting out of inflation adjustments means your sum insured won’t automatically increase - but it doesn’t freeze your premium amount.
Level/variable premiums can still change over time. If Resolution Life reviews base premium rates, any change in the base premium rate will apply to all plans of the same type. Also your plan fee can be increased by the CPI rate meaning a level premium can change.
Myth: If my cover increases, my premium will automatically go up
Fact: Your policy may include a large sum insured discount, which can reduce your premium.
So while inflation adjustments (based on CPI) may increase your cover, your premium could actually decrease if the higher cover qualifies you for a better discount tier.
Contact us
- Login to My Resolution Life to chat to us
- Submit an online enquiry
- Contact your financial adviser
Important information
Where the information on this website is factual information only, it does not contain any financial product advice or make any recommendations about a financial product or service being right for you. Any advice is provided by Resolution Life Australasia Limited ABN 84 079 300 379, AFSL No. 233671 (Resolution Life), is general advice and does not take into account your objectives, financial situation or needs. Before acting on this advice, you should consider the appropriateness of the advice having regard to your objectives, financial situation and needs, as well as the product disclosure statement and policy document for the product. Any guarantee offered in the product is only provided by Resolution Life. Any Target Market Determinations for our products can be found at resolutionlife.com.au/target-market-determinations.
Resolution Life does not make any representation or warranty as to the accuracy, reliability or completeness of material on this website nor accepts any liability or responsibility for any acts or decisions based on such information.
Resolution Life can be contacted at resolutionlife.com.au/contact-us or by calling 133 731.
