INDUSTRY INSIGHTS
In today's economic climate, managing insurance costs has become increasingly challenging. While MetLife Protect is highly competitive and rated in the top-quartile1, there are several additional strategies that you may want to consider to help your current and future MetLife clients manage their insurance premiums while maintaining adequate coverage.
One effective approach is to reduce the sum insured or monthly benefit. This involves a simple application process and can lead to a proportionate reduction in premiums. However, it's important to regularly review your clients’ coverage to ensure it aligns with their financial needs and debts. While reducing the sum insured can save costs, it may result in the loss of large sum insured discounts and potential future exposure if health conditions change.
Another strategy is to convert cover to superannuation. This allows your clients to utilise the cash flow of superannuation to fund insurance premiums. Available for Death Cover, TPD Cover, and Income Cover, this approach offers tax-deductible premiums. However, it may result in the loss of benefits due to differing policy terms between super and non-super policies.
Declining CPI indexation is another way to manage premium costs. CPI indexation can significantly increase premiums year-on-year. By declining CPI indexation, you can avoid these increases, but it's important to note that this may erode the future value of cover over time.
Managing Extras Cover and Extra Cost Options can also help in maintaining the desired level of cover while managing costs. MetLife Protect allows your clients to add or remove optional extras as needed to meet their changing needs.
Linked Cover and Super Linked Cover are cost-effective ways to maintain coverage. Linking lump sum cover can be more affordable than standalone policies. Super Linked Cover allows for cover to be split across policies held inside and outside of superannuation, providing additional benefits while funding the primary cover from superannuation.
Converting from Own to Any Occupation TPD can lead to significant premium savings while still providing substantial coverage. This conversion can be done with a simple application or request.
Increasing the Income Protection Waiting Period is another strategy. Extending the waiting period before benefits are payable can reduce premiums. This requires careful consideration of how long your clients can manage without an income and other available sources of income.
Reducing the Income Protection Benefit Period can also lead to substantial premium savings. This strategy should be balanced with the need for long-term financial protection.
Applying for Healthy Lives Discount and Non-Smoking Premium Rates can lead to significant premium discounts. Maintaining a healthy lifestyle and non-smoking status are key factors in qualifying for these discounts.
Lastly, features like the Involuntary Unemployment Premium Waiver Benefit and Income Cover – Cover Pause Feature help maintain cover during periods of involuntary unemployment, unpaid leave, or financial hardship.
By considering these strategies, your clients may be able to effectively manage their insurance costs while ensuring they have the necessary coverage to protect their financial well-being.
For more support on how to manage your clients’ insurances in the current environment, speak to a MetLife BDM today.
References:
1. Adviser Ratings data: 2024 Life insurance benchmark study, comparing 9 insurers.
Adviser use only.
MetLife Protect and life insurance products are issued by MetLife Insurance Limited (ABN 75 004 274 882, AFSL 238096) (MetLife).
The information provided is general only and does not take into account your personal or financial situation, needs or objectives. While care has been taken in preparing this information, MetLife does not warrant or represent that the information, opinions or conclusions contained in this information are accurate.
Before deciding whether to distribute, acquire, or continue to hold, any of our products, please read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) available at metlife.com.au. Speak to a financial adviser for specific personal financial advice.
© MetLife Insurance Limited (MetLife) 2024. While care has been taken in preparing this material, MetLife does not warrant or represent that the information, opinions or conclusions contained in this information are accurate. The information provided is general information only is current as at the time of production. It has been prepared without taking into account your personal objectives, financial situation or needs and you should consider whether it is appropriate for you. It is not intended to be a substitute for professional advice and should not be relied upon as such. MetLife recommends that you obtain independent and specific advice from appropriate professionals before implementing a financial strategy, including reading any relevant product disclosure statements and/or terms and conditions.
This website contains general information only, which does not take into account your personal financial situation, objectives or needs. Before deciding whether to acquire, or continuing to hold, any of our products, please seek appropriate independent financial advice to assess whether it is suitable for you. You should also consider the relevant Product Disclosure Statement, available upon request by calling 1300 555 625, before making any decision. Life insurance products are issued by MetLife Insurance Limited ABN 75 004 274 882, AFSL 238096.
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