Multiple factors contribute to the cost of your insurance premiums. These include how much cover you choose to take out as well as specific attributes such as age, gender and other personal risk factors. You can read about these and more below.
I want to know how my premium is calculated
We calculate your premium based on the type of cover, structure and amount of cover you apply for. It will also be affected by other product choices and personal circumstances. Naturally, higher levels of cover or a broader range of benefits and features will attract higher premiums. Together with your financial adviser, you’ll be able to customise your insurance to make sure it suits your individual needs.
Personal circumstances or specific attributes such as age, gender and health will also influence the cost of premiums. If these circumstances or attributes increase the risk of injury, illness or death, this may impact your premiums. We assess this in a process called underwriting, where we ask you questions about your medical history, hobbies and lifestyle choices, occupation and financial information.
You can learn more about these factors and how they affect your premiums below.
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Age and gender
As you get older, the risk of certain events becomes more probable, and your premiums are calculated to reflect this.
There may also be a difference in premiums for males and females as risks associated with each gender change over time. For example, females have a higher life expectancy than males and are less likely to have fatal accidents at younger ages, so females’ premiums can often be lower at older and younger ages for Life Cover.
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Health and family history
You're more likely to claim if you have pre-existing or hereditary medical health conditions. The premium we calculate reflects that risk and is taken into consideration when you apply for insurance.
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Work and lifestyle choices
Your occupation or your participation in sports or recreational pursuits may carry a greater risk of injury or illness. This may in turn increase your premium. Lifestyle choices such as smoking can also increase your premiums.
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What you’re covered for
The types of cover you have on your policy (Income Protection, Total and Permanent Disability, Critical Illness and Life Cover) and the amount you’re insured for contribute to the cost of your premium.
To see what you’re covered for, head to my.mlcinsurance.com.au/documents and view your latest annual renewal notice and policy schedule.
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Premium structure
Variable age-stepped premiums (also known as stepped premiums) increase as you age. Each year, premium changes reflect the increased likelihood of you claiming as you age.
Level premiums* spread the premiums’ costs over a number of years. This means premiums start higher than variable age-stepped premiums, which increase as you age. Depending on how long you hold your insurance, the cost may be lower at some point in the future.
Regardless of structure, your premiums may vary if we change our premium rates, or the sum insured changes, either by voluntary increases, or indexation.
*Up until 2 February 2024, we offered level premium structures. We have since discontinued level premiums for new MLC Insurance and MLC Insurance Super policies. If your policy was current on 2 February 2024, you can still switch between stepped and level premium structures.
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Discounts
Depending on your health, the cover or combination of cover chosen, you may be eligible for a discount. These discounts are not guaranteed, may be varied or removed and may not apply over the life of your policy.
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Inflation proofing
Inflation proofing increases the amount you’re insured for annually in line with the cost of living. While inflation proofing maintains your policy’s value over time, it also increases your premiums. If you want to opt out of inflation proofing for the year ahead, log in to
my.mlcinsurance.com.au or call us on
13 65 25.
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Waiting and benefit periods for income protection
The length of waiting and benefit periods you select for your Income Protection insurance influence the cost of premiums. Generally, shorter waiting periods and more extended benefit periods will typically increase premiums and vice versa.
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How you pay your premiums
How you fund your insurance and the frequency of your payments can impact the cost of your premiums. For example, if your insurance premiums are funded via an external rollover payment from your super, you may be eligible for a 15% super tax rebate. Paying annually upfront rather than in monthly instalments can also lower your premium.
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Other factors
Stand-alone cover, linked cover, and the number of lives insured are factors that can affect your premium. Where you live may also influence your premium, as government stamp duty varies between states.
I want to understand if my premium rates can change
Your individual insurance choices and personal circumstances are applied to our set of standard premium rates to calculate your premiums.
The standard premium rates are not guaranteed to stay the same.
Occasionally, we need to adjust our standard premium rates to make sure we can continue to support our customers when you need us the most – at claim time.
When we review our standard premium rates, we consider multiple factors including the following:
- For expected future claims costs, factors can include recent claims experience, or industry trends which show a likely increase in the future cost of claims.
- For other costs of doing business, factors can include changes to tax, government or other mandatory charges, the cost of reinsurance, the costs to meet compliance and regulatory requirements, distribution costs, and changes to business operating expenses.
- For reasonable margins in providing the insurance cover, factors can include changes to the economic environment such as interest rates, inflation rates and market returns, or the achievement of a fair shareholder target return for the commercial risks taken in providing the insurance.
If we make changes to our standard premium rates, we will always act reasonably and with utmost good faith, and any changes will be applied consistently for policies of the same kind. This means your policy will not be singled out for a change in premium rates.
If your premium increases, you have several options to manage the cost of your cover. These include reducing your cover or changing the options you’re covered for. Please speak to us or your financial adviser for assistance.
