Insurance companies are changing the rules

1. What change will come into effect in October 2021 in relation to monthly benefit payments?

A) Monthly benefit payments will, in most cases, be calculated on the income earned during the previous, consecutive 12-month period

B) Monthly benefit payments will, in most cases, be paid according to the value agreed at the outset of the policy

C) Monthly benefit payments will, in most cases, be based on the best, consecutive 12-month period over the last three years

D) Monthly benefit payments will, in most cases, be based on the best 12-month period over the last two years

‍

2. What change will come into effect in October 2022 in relation to guaranteed renewable policy terms?

A) Insurers will only be able to offer income protection policies which are guaranteed renewable for five years

B) Insurers will only be able to offer income protection policies with a waiting period of 120 days

C) Insurers will only be able to offer income protection policies with a benefit period to age 50

D) nsurers will only be able to offer income protection policies which are guaranteed renewable for 15 years

‍

3. From 1 October 2021, insurers must ensure that:

A) the benefit paid does not exceed 90% of earnings at the time of claim, for the first six months

B) the benefit paid does not exceed 70% of earnings at the time of claim, after the first six months

C) after six months, the maximum benefit paid does not exceed $30,000 per month

D) All of the above

‍

4. Existing agreed value income protection policy terms will need to be modified to comply with the new rules from 1 October 2021.

A) True

B) False

‍

5. The changes to income protection are aimed at managing the financial risk associated with the product, after five years of heavy losses.

A) False

B) True