We’ve made some important product and pricing changes to Encompass Protection, effective 15 November 2024.
Product changes
The product changes are outlined below.
All cover types
Premium types
In response to consumer and regulator feedback, life insurers are adopting a new naming convention to describe the premium structures used in life insurance products.
‘Stepped’ premium types will now be known as ‘variable age-stepped’ premiums.
Please note, this is a name change only, all other aspects of the premium structure remain the same.
Lump sum covers
Healthy Life discount
Access to the ‘Healthy Life’ discount has been simplified for new customers, removing the loadings and exclusion restriction, as well as the requirement that the insured person hadn’t smoked in 10 years. From 15 November 2024, the eligibility criteria will be:
- Non-smoker (for 12 months, consistent with normal underwriting guidelines), and
- BMI between 19-28.5 inclusive.
Income Protection Cover
Superannuation Contribution Option
The policy wording has been improved to allow a higher sum insured under the Superannuation Contribution Option.
If this applies to your client, they can increase their Superannuation Contribution Option sum insured to a higher amount. Please note, any increases to the sum insured will require underwriting.
| New calculation | Previous calculation |
| A maximum of:
· 11.5% of the insured person’s earnings up until 30 June 2025, and · 12% of the insured person’s earnings from 1 July 2025. |
A maximum of 10% of the insured person’s earnings. |
Income Protection Cover – inside super only
Total Disability Benefit and Partial Disability Benefit
We’ve made changes to the disability definitions (total disability and partial disability), and ‘When we’ll pay’ terms. We’ve removed the need to meet the temporary incapacity definition within the disability definitions. Instead, your client will now need to meet the SIS definition of temporary incapacity for the Total Disability Benefit and Partial Disability Benefit to be paid. These changes ensure that the requirement for temporary incapacity will not affect or delay the start of the waiting period. The following changes have been made to the policy wording;
- Removal of the below policy wording from both the total disability and partial disability definitions:
“…the insured person must also satisfy the definition of temporary incapacity…” - Added the below policy wording under ‘When we’ll pay’ for both the Total Disability Benefit and Partial Disability Benefit:
For insurance inside super, you must also have satisfied the SIS definition of temporary incapacity before any benefits are payable. - Added the below definition under ‘General definitions’:
SIS definition of temporary incapacity means in relation to a member who has ceased to be gainfully employed (including a member who has ceased temporarily to receive any gain or reward under a continuing arrangement for the member to be gainfully employed), means ill-health (whether physical or mental) that caused the member to cease to be gainfully employed but does not constitute permanent incapacity.
Supplementary Income Protection Insurance
We’ve also changed the terms of Supplementary Income Protection Insurance to be consistent with the changes to the Total Disability Benefit and the Partial Disability Benefit. To effect this change, reference to temporary incapacity has been removed and replaced with SIS definition of temporary incapacity, and the relevant paragraph now states:
If no benefit is payable under the Income Protection Cover in super because you have not satisfied the SIS definition of temporary incapacity solely because you are not gainfully employed at the time of the disability, we will assess if we can pay you a benefit under Supplementary Income Protection Insurance.
TPD Cover
Own Occupation definition
The policy wording has been changed to remove the ability for clients to choose which occupation will apply for the purposes of assessment at the time of claim.
| New wording | Previous wording |
| Own occupation means the occupation in which the insured person was engaged at the time of their application for this insurance unless they have changed their occupation since then.
If the insured person has changed their occupation since their application for insurance, own occupation means the last occupation that the insured person was engaged for a continuous period of at least six months prior to their date of disability. |
Own occupation means the occupation in which the insured person was engaged at the time of their application for this insurance unless they have changed their occupation since then. Where the change is to an occupation or occupation category that’s eligible for the own occupation TPD definition, you may choose to have a claim assessed under either the insured person’s occupation at the time of their application or their occupation immediately preceding their date of disability. Otherwise, own occupation means the most recent occupation that the insured person was engaged in immediately preceding their date of disability. |
Home Duties TPD definition
The policy wording has been changed to add the requirement that the insured person is regularly attending and following the advice and recommendation for treatment of a doctor in order to be considered totally and permanently disabled.
Future Increase Benefit
The policy wording has been improved to increase the total maximum you can increase the TPD Cover sum insured by under the Future Increase Benefit.
The previous wording noted that the TPD Cover sum insured cannot exceed $2 million after exercising the benefit. This limit has been increased to $3 million.
Critical Illness Event definition changes
Following a recent review, we’ve updated some medical definitions. In the unlikely event that your client is disadvantaged by the change, we’ll apply the prior definition, provided it hasn’t become obsolete. These changes only apply to Critical Illness Cover.
| Cancer – excluding specified early stage cancers | We’ve changed the definition in line with current medical diagnostic techniques, and noted that pituitary adenomas/pituitary neuroendocrine tumours (known as PitNET) are excluded. The new definition is:
Any malignant tumour diagnosed with histological confirmation and characterised by:
The term malignant tumour includes leukaemia and lymphoma. The following are excluded:
The procedure must be performed as a direct result of the carcinoma in situ and specifically to arrest the spread of malignancy, and be considered the necessary and appropriate treatment.
|
| Out of hospital cardiac arrest | We’ve updated the definition in line with current medical diagnostic techniques. The new definition is:
Cardiac arrest which is not associated with any medical procedure and is documented by an electrocardiogram (ECG), occurs out of hospital, and is due to cardiac asystole or ventricular fibrillation with or without ventricular tachycardia. If an ECG is not available, we’ll reasonably consider other evidence which unequivocally confirms a cardiac arrest has occurred. Such evidence may include Automated External Defibrillator (AED) data, ambulance or hospital medical records, documented administration of cardiopulmonary resuscitation (CPR) by an attending ambulance officer or hospital clinical staff. |
| Adult onset insulin dependent diabetes mellitus | We’ve updated the definition in line with current medical diagnostic techniques. The new definition is:
The diagnosis after the age of 30 of Type 1 (autoimmune) diabetes, confirmed by development of diabetes associated islet autoantibodies and requiring insulin to manage the condition. |
| Deafness in one ear – permanent
(previously named ‘Deafness in one ear – total and irreparable’) |
We’ve changed the name of the event and updated the definition in line with current medical diagnostic techniques. The new definition is:
The irreversible and irreparable loss of hearing in one ear, where the ear has an auditory threshold or greater than 90 decibels from the frequencies of 500 hertz to 3,000 hertz, even with amplification. |
Existing customers
Please note, applications submitted to us before 15 November 2024 will still have access to the terms and conditions of the previous PDS where those are more advantageous to the customer even if their policy goes into force after 15 November 2024.
These updated definitions apply to future claims only. They don’t apply to claims caused by health conditions or events that occurred before 15 November 2024 (the effective date of the update). Should your client need to make a claim, our claims team will have details of all the policy conditions relevant to their cover.
Healthy Life discount
If your existing client did not qualify for the Healthy Life discount on their Encompass Protection policy solely because they had smoked within the last 10 years, they may be eligible for the discount after 15 November 2024.
In order to apply for the discount, your client will need to complete the non-smoker declaration form available here.
Please note, customers with a loading or exclusion won’t be eligible to add the Healthy Life discount to their existing policy.
New PDS, Adviser Guide and Statement of Advice
An updated Encompass Protection PDS, Adviser Guide and SoA are available for download on our website.
Quotes
The new pricing applies to all new quotes from 15 November 2024.
All quotes and applications created prior to this date will expire as at 8pm on 10 January 2025 from the adviser portal.