Premium changes from 1 August 2020

FAQs

• How much are premiums increasing by?

  We’re only increasing premiums on some personal to age 65 (and 70) income protection covers, Key Person Cover and new level trauma (including Trauma Multi) covers, and new level personal to age 65 (and 70) income protection.

  Each affected customer will be impacted differently, depending on the combination of their cover/s, sums insured and age. New premiums from 1 August 2020 will be reflected in affected customers’ renewal schedules.

• Why are you increasing premiums?

  As you know, we’re well-capitalised and in good financial shape. These changes are part of our commitment to sustainability. Sustainability is important because it allows us to keep delivering on our promises to customers at claim time over the long term.

  At an industry level, the sustainability of income protection and trauma products is under pressure due to rising claims volumes, and unfortunately sometimes insurers need to pass on cost increases to customers. Increasing premiums is one way to address this.

• But why now, when many people are struggling due to the impacts of Covid-19?

  We constantly assess market conditions and don’t take decisions like this lightly. We’ve considered the economic impacts of Covid-19 on customers as part of our decision to increase premiums. We acknowledge some customers will be experiencing financial hardship so please make sure you’re aware of the options available so we can work together to find solutions – and help these customers keep their policies in place.

  You can find more details on these options on Adviser Hub here.

• Has Fidelity Life been affected by rising claim volumes?

  Yes, like most insurers, we’ve been experiencing a steady increase in claims, especially income protection, over time. Unfortunately sometimes insurers need to pass on cost increases to customers. What’s important is that we balance the need to deliver on our promises to customers at claim time, with our long-term sustainability as a business.

• My customers will struggle to pay their premiums, what are their options?

  It depends on their individual circumstances and you’re in the best position to advise them on their options. We also offer financial hardship options – for more details go to Adviser Hub here or contact our Retention team on 0800 203 750 or assistance@fidelitylife.co.nz

• Why aren’t you letting customers know about these increases directly?

  Don’t forget the new premiums will be reflected in affected customers’ renewal schedules for policies renewing from 1 August 2020 – these are being mailed out from 19 June. A list of all of your policies renewing in August is now available for you on Adviser Centre.

  In this instance we’ve decided the best communications approach is to provide advisers with all you need to know about the premium increases so you can help customers with any queries. The main reason for this is that questions about premium increases often lead to discussions about affordability and need - these are discussions advisers are best placed to handle.

  Another reason is that customers will be impacted in different ways, depending on the combination of their cover/s, sums insured and age. It’s therefore technically very difficult to communicate with each customer in a meaningful way.

• Are there any product / cover changes or enhancements?

  No, there’s no product or cover changes at this time.

• Is Fidelity Life still priced competitively on income protection and trauma?

  Yes, we believe our products offer customers a good range of features and benefits at a reasonable price to help meet their needs.

• Will you guarantee pricing on illustrations completed before 1 August 2020?

  As per our usual practice, illustrations completed before 1 August 2020 will be honoured for 30 days from the date on the illustration, as well as any new applications which are already in the new business pipeline.