Values-based decision-making
Adviser Business Valuation changes and challenges seminar

AIA new offer updates

Advisers with AIA agency agreements will already have received many details - a commendable level of detail - from AIA in advance of the launch of their new AIA Living offer. I will only summarise it here for news purposes: 

From 5 August this will be AIA's Living range: 

Life Insurance

  • AIA Living Life Cover
  • AIA Living Family Protection
  • AIA Living Accidental Death

Trauma Insurance

  • AIA Living Critical Conditions
  • AIA Living Progressive Care

TPD Insurance

  • AIA Living Total Permanent Disablement

Income Protection Insurance

  • AIA Living Income Protection
  • AIA Living Mortgage and Income Protection
  • AIA Living Business Continuity
  • AIA Living Rural Continuity
  • AIA Living Business Income Support
  • AIA Start-Up Income Protection

Health Insurance

  • AIA Private Health
  • AIA Private Health Plus 

Accidental Injury Insurance

  • AIA Living Accidental Injury Cover

That omits certain less-used products, such as the 'essential' version of IP and Trauma, and the specialists and tests add on (when not part of medical).

The multiple benefit discount is significant: 

Our new tiered Multi-Benefit Discount will apply to AIA Living risk products (excluding health) based on the number of products held by the customer:

  • 10% for two products;
  • 12.5% for three products; and
  • 15% for four products.

The Multi-Benefit Discount applies within product category levels: Life, Income Protection, Trauma, and TPD. i.e A customer who purchases Life Cover, Loss of Earnings, and Mortgage and Income Protection will receive a 10% discount on the basis that Loss of Earnings and Mortgage and Income Protection fall within “Income Protection” product category.

To qualify for the Multi-Benefit Discount, customers are required to hold a minimum $100,000 Life Cover plus a minimum $75,000 Trauma, $75,000 TPD, or $2,000 (monthly benefit) Income Protection.

This is added to any Vitality discount, which could be 10%. It will be interesting to do comparisons with both discounted and un-discounted premiums.

Commissions have also been updated. I won't repeat the entire schedule here, but I will be updating the commission comparison in the next week, (available to institutional subscribers) if you are keen to see the impact. One thing worth highlighting from that change is the removal of any links to persistency and production levels. Asteron Life has recently made a similar change, and I expect that all commission systems will no longer have these links in the future. AIA's comment is below: 

We have taken the view that volume and persistency related commission bonuses drive unnecessary complexity and risk distracting attention away from the important work that Advisers perform for their clients.

Product enhancement pass-backs are also being extended across the range - to older AIA contracts: 

We are also pleased to advise that we have extended the AIA pass-back benefit to include all risk policies (Life, Trauma, Income Protection, and TPD) issued from 1 June 2001. Previously, the pass-back benefit applied to policies issued since 1 January 2003.

That comes at a cost for some holders of older trauma policies, who will have a series of premium increases to bring their premiums into line with more recent contracts. 

Replacement business rules and details about how to do quotes were also included. 

 

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