How is the inflation adjustment calculated?

The inflation adjustment is worked out using 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 is linked to the inflation adjustment, each year we increase your sum insured by either the increase to the consumer price index (CPI) or a fixed percentage - whichever is higher.

How does the inflation adjustment work?

With Resolution Life insurance policies, the inflation adjustment is an optional feature. If your sum insured is adjusted for inflation, you will receive a larger benefit if you make a claim. It’s important to note that your premiums will also increase every year.

• For Life, TPD or Trauma cover, the inflation adjustment amount is either 5% or the increase in CPI – whichever is greater.
• For Income Protection cover, the inflation adjustment amount is either 3% or the increase in CPI – whichever is greater.

Allowing the amount of cover to increase automatically may be right for some people, while others may not want their cover and premium to increase. You can choose to keep the adjustment or opt out, either for one year or permanently.

How do I check if my policy is currently adjusted for inflation?

You can check whether your policy is currently adjusted for inflation within My Resolution Life under ‘Policy Details’ or within your most recent Annual Statement.

Because this feature is optional some people choose to keep the adjustment to ensure they have enough insurance to cover their needs, should they ever need to claim in the future. While on the other hand some people choose to opt out of the inflation adjustment, particularly if affordability is a concern or they no longer need as much cover.