We are updating our website
So that we can direct you to the right page,
please select your product from the list below.
Your life insurance premium is likely to change each year and you may wonder why. As one of Australia’s largest life insurers, we want to help you understand your premium - how your premium works, how we calculate it, and why it can change.
How your life insurance premium works
Your premium contributes to a shared pool of funds that helps to pay claims. We consider each policyholder’s circumstances to determine their likelihood of making a claim. That’s how we make sure each policyholder’s premium makes a fair contribution to the shared pool of funds.
Why your premium may change each year
We’ll base your premium on your circumstances, the cover and options you’ve chosen, your premium type (stepped or level), your plan structure (linked or Stand Alone covers), your likelihood of making a claim, and the potential cost of the claim. That’s why each person’s Life Insurance policy may be different.
We work out your insurance premium based on what cover you hold, how much you are insured for and other factors, including but not limited to:
• Age at policy anniversary
• Gender
• Smoking status
• Your medical and general health history when you applied
• Your occupation
• Premium structure and payment frequency you have
• Your state of residence for stamp duty purposes
To calculate your premium, we consider several factors, and it is these factors that determine your premium. These include:
• Aged-based increases - If you’re paying a stepped premium the cost of your cover usually rises each year as you age because the risk of you suffering a claim event increases as you get older
• Inflation (also known as indexation, cost of living, CPI) - Your sum insured may increase each year to keep up with inflation. As your sum insured increases, so does your premium. These increases are referred to as an inflation adjustment, and you can choose whether to opt out of them. Learn more about inflation adjustment and how to opt out.
• Stamp Duty - This is a charge levied by State/Territory Governments and therefore varies depending on where you live and what type of insurance cover you have.
Why may underlying premium rates change
• Cost of paying claims - Our biggest cost, and the reason we exist, is the payment of claims to our customers. We have an obligation to make sure we’re always there when you or your loved ones need us and we are able to keep paying claims long into the future.
The insurance industry continues to see large volumes of new claims, and in relation to income protection and TPD, with customers are receiving income protection payments for longer than previously. A material contributor is Australia’s mental health issues, with Resolution Life supporting significant numbers of Australians with conditions such as anxiety, stress and depression.
It is important that we monitor the ratio of premiums coming into the pool compared to claims payments going out, to ensure we can continue to fund claim payments. Regular reviews of our product pricing seeks to ensure we can continue to sustainably support our customers over the long term.
• Industry-wide challenges - Factors such as the rising cost of living and number of claims affect all life insurers.
• Wider economic challenges - What is happening in the economy can put pressure on insurance premiums, for example rises in interest rates and the impact of returns on investments held.
Why level premiums can also increase
Level premiums don’t increase each year as the insured person gets older and generally stay the same for each layer of cover during the term of your plan.
Your overall premiums will increase if you increase the sum insured or if you accept the increase in cover each year provided by the Automatic Inflation Benefit or if we review the premium rates for your product as a whole. A layer of cover is made up of your initial sum insured and additional layers are made up of any increases in sum insured you apply for or increases due to the Automatic Inflation Benefit. Premiums (and any applicable fees or government charges) can change, regardless of the premium type. If Resolution Life review base premium rates, any change in the base premium rate will apply to all plans of the same type.
Level premiums are not guaranteed and the underlying rate can change as detailed above
You're in control and have options
You can’t change all the factors that contribute to the total cost of your insurance, but there are many elements you can control and ways of potentially reducing the cost of your insurance premiums whilst staying covered. Here are some options you could consider:
• Extend the waiting period on your income protection policy.
• Review the benefit period on your income protection policy.
• Consider paying your premiums from your superannuation fund, rather than from your monthly household cashflow (although this will reduce your retirement savings).
• Remember that premiums paid for income protection cover outside of super may be tax deductible.
• Remove automatic inflation adjustments (also known as indexation, cost of living, and CPI). Learn more about inflation adjustment and how to opt out.
• Review your sum insured (your amount of cover).
• Cancel additional benefits or cover types that you no longer need.
There are lots of ways to reduce your premium amount. Learn more about ways you can make your insurance more affordable.
How can Resolution Life help?
If your circumstances have changed since you last reviewed your policy, now’s a good time to contact your financial adviser to discuss your options.
You can also contact Resolution Life on 133 731 Monday to Friday, 9.00am to 5.30pm (AEST/AEDT).
