Understanding premium increases

The life insurance industry, particularly Individual Disability Income Insurance (more commonly referred to as Income Protection), continues to face sustainability challenges. 

Whilst recent pricing changes have improved our sustainability position, our annual product review continues to highlight higher than expected claims volumes in long-term benefit periods and professional occupation classes. Further price changes to those policies are required to ensure we can provide long-term support to those that need it most during the times that matter – at claim time.

 BT Income Protection payments graph showing increase in claim payments from 2017 to 2020

BT Income Protection claim payments6

“Our flexible policies may allow you to change your cover and this provides you with some options below if you need to reduce your premium.*”

“We always try to ensure our premium pricing is fair and reflective of the risk we are covering, and we know increasing premiums can be challenging.”

Robert Daly, Managing Director, Insurance, SBD
Robert Daly, Managing Director, BT Life Insurance

* Making changes to a policy may impact such things as the benefit payable, the claim you can make or waiting period. Insurance cover may have different features, which if altered may impact the premium. It is important to understand that this is general information only and the options outlined do not take into account your personal objectives, financial circumstances or needs. You may wish to speak to your financial adviser, or seek professional advice before you consider making any changes or cancelling your cover.

For more information about premium increases please read our frequently asked questions (FAQs). 

If your premiums are increasing, a Premium increase letter regarding the changes, followed by your Renewal letter, will be sent to you prior to any premium changes taking effect. If so, changes to premiums will take effect from your next policy anniversary (renewal date):

  • Premium increase letter: You will receive a letter that shows the percentage (%) increase that will apply to your premium at the Policy anniversary date.
  • Renewal letter: Following your Premium increase letter, you will receive your Renewal letter containing the ($) amount of your premium to be paid for the following year, as well as other relevant information about your cover.
  • Policy anniversary date (renewal date): Unless you have actioned any changes to your cover before or on the policy anniversary date (renewal date), the new premiums will take effect.
Illustration shows a notification letter will be sent 90 days prior and renewal letter will be sent 20 days prior to your policy anniversary date

Jordan has some time before the new premium will be debited to make changes to his cover in order to reduce premiums, or keep his policy the same and pay the new premium.

If he doesn’t want to make any changes, there is nothing further he needs to do.

We understand that when premiums increase, it might become challenging to manage the increasing cost of staying covered and financially protected.

There are a few things you could consider below. You may wish to speak to your financial adviser, or seek professional advice before you consider making any changes or cancelling your cover2.  

Your Protection Plans policy has some flexibility

There are some options to change your cover in order to reduce your premiums for your consideration, which may or may not be suitable for you2.

View our comprehensive options booklet to find out more. 

Here are some features of your policy that provides you with options to reduce your premium.

You can choose one option or combine more than one to help reduce your premium even further. You may wish to speak to your financial adviser, or contact us to secure quotes on one, or more of these options.

Reduce the monthly benefit amount

You may no longer need the benefit amount that you currently have.

For example, if you have paid down debt, and perhaps have less expenses to pay for since you took your policy out, then you may be able to reduce your benefit amount.

If you decide in the future to increase the benefit amount again, it will be subject to underwriting and eligibility requirements.

Change the waiting period before you can make a claim

Waiting Period is the length of time you will have to wait till you become eligible to receive the Income Protection monthly benefit when you make a claim.

Generally, the shorter the waiting period, the higher your premium will be. If you increase the waiting period and decide in the future you want to reduce it again, it will be subject to underwriting and eligibility requirements.

Change the benefit period that you can claim for

The longer the benefit period, the higher the premium.

The benefit period is the maximum length of time your Income Protection benefit will be paid for, in the event of claim.  If you reduce the benefit period and decide in the future you want to increase it again, it will be subject to underwriting and eligibility requirements3.

Change cover from Income Protection Plus to Income Protection

Income Protection Plus offers more comprehensive cover by offering a number of extra benefits such as specified injury, crisis benefit, waiver of income protection premium or child care benefit, but these do come at an additional cost.

Please note that should you change your Income Protection Plus cover to Income Protection, and decide in the future you would like to change it back again it will be subject to underwriting and eligibility requirements.

Remove optional accident benefit if included in your policy 

Your policy may have an optional Accident Benefit included. The optional Accident Benefit pays a benefit if the Insured Person is totally disabled for a specified number of days during the waiting period due to an accidental injury. 

A future optional accident benefit take up will be subject to underwriting and eligibility requirements.

Change cover from Agreed Value to Indemnity4

Your cover may be set for a specific amount. This amount would have been based on your income at the time the policy commenced and stays the same even if your income changes later.

This is called Agreed Value and is more expensive than Indemnity cover which uses your income at the time of claim to calculate your benefit.

It is important you know that if you change your cover from agreed value to Indemnity, you are unable to change it back in the future.

Making changes to your cover in order to reduce your premium will not require any medical questions to be completed with regards to your health.

If you decide to make changes in the future that will increase your cover and features, please note that they will be subject to an underwriting assessment and possibly additional terms and conditions.

Flexible options in practice – customer scenarios

Take a closer look at how people have used some of these options2 and how much they have been able to save5. Here are their stories.

View our customer options booklet (PDF 3.4 MB)

Helping our customers at claim time

We are proud to help our customers and their families with financial assistance at a time when it’s needed most. In the financial year ending 30 September 2021, we paid close to $492m6 in claims, which included over $130 million6 in income protection payments to more than 2,356 claimants6.

$492m6

Paid in Life Insurance claims

$130m6

Income Protection claim payments

2,3566

Income Protection claimants

Why is this happening?

To preserve the sustainability of our products, we regularly review our premium rates for stepped and level premium policies and make changes if needed. For instance, we may need to increase our premiums if we are paying more claims than we expected to pay, or if the economic conditions worsen, or if we need to adhere to directives from government regulatory bodies. Likewise, premium rates may also decrease following a review. 

My premium went up last year and I took up an option / changed my policy

Your price increase notice is based on your current benefit design at the time of the notification. This reflects any changes you made to your policy prior to the notice being sent. 

Will there be other premiums increases?

Although it is hard to predict where we will be in the future, especially during these challenging times, we will always inform you at least 3 months before the increase at renewal time (depending on the terms of your policy).

This will give us an opportunity to work with you should you need to contact us to discuss if you are having difficulty meeting your payments, and provide you with options that may be available to reduce your premium.

How is my premium increase calculated?

Pre­mium rates are based on a num­ber of fac­tors in­clud­ing the cost of pro­vid­ing your cover.

Pre­mium rates vary by prod­uct fea­tures and level of risk be­ing in­sured, and this can re­flect in the un­der­ly­ing cost to pro­vide cover. Due to this, some­times two dif­fer­ent peo­ple will re­ceive dif­fer­ent pre­mium in­crease amounts.

I can’t afford this policy anymore, what are my options?

Your Protection Plans policy has some flexibility, and here are some options that may help make your premiums more affordable. There may also be other options available.  You may wish to you speak to your financial adviser or seek professional advice regarding these options, and before making changes to your policy.

I just received a letter from BT which only shows a percentage (%) of what my premium is going up by – what is the actual amount?

If your premium is increasing, you will first receive a Premium increase letter that shows the percentage (%) increase that will apply to your premium at Policy anniversary (renewal date).

Following your Premium increase letter, you will receive your Renewal letter containing the ($) amount of your premium to be paid for the following year, as well as other relevant information about your cover. 

You can also use this form to 'get information on premium increases' and ask for a 'new renewal quote'. We will prepare this calculation for you and send it to you by email.

If you’d prefer to discuss this over the phone, please call us on 1300 553 764 or call your financial adviser.

I understood that level premiums would not go up, why are they now increasing?

Level premiums are not guaranteed to stay flat for the life of the Policy, and there is a real chance they are likely to increase in the future. We can increase level premiums for a range of reasons including if: 

  • we decide to increase our premiums for a group of similar policies, for example if we get more claims than expected, or 
  • the sum insured increases (including CPI increases to the sum insured), or 
  • the policy fee increases

Will discounts on my policy still apply?

Yes, premium changes do not impact existing discounts and loyalty benefits.

However, your multi-policy discount will be affected if your cover is reduced to holding one policy only.

My premiums are being waived due to COVID-19 financial support – what does this mean for me?

Your premium waiver will continue to be waived up until the agreed date. After this date, your premiums will be payable again. If your policy renewed during the time your premiums were being waived, your new premium will be payable immediately after the end of the waiver period. If your policy didn’t renew during the time your premiums were being waived, your previous premium will recommence and your new premium will then be payable from when your policy comes up for renewal.

We are here to help

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Monday - Friday

Fill out the online form and we will get back to you.

If you are facing financial hardship, there may be ways we can help. Please contact us on 1300 551 431 to discuss what options may be available. 

Things you should know

A target market determination has been made for Protection Plans products. Please visit bt.com.au/tmd for any of our target market determinations.

The Insurer and Issuer is Westpac Life Insurance Services Limited ABN 31 003 149 157 AFSL 233728, except for Term Life as Superannuation, Income Protection as Superannuation and Income Protection Assured as Superannuation, issued by BT Funds Management Limited ABN 63 002 916 458 AFSL 233724 as Trustee of Retirement Wrap ABN 39 827 542 991. They are subsidiaries of Westpac Banking Corporation ABN 33 007 457 141 AFSL 233714, who does not guarantee the insurance. This information does not take into account your personal circumstances. Terms and conditions, and limitations and exclusions apply. Please read the Product Disclosure Statement to see if this insurance is right for you.

© Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714


1. The Australian Prudential Regulation Authority (APRA) released its Quarterly Life Insurance Performance Statistics publication for the quarter. https://www.apra.gov.au/news-and-publications/apra-releases-life-insurance-statistics-for-june-2021

2. The information does not take into account your personal objectives, financial circumstances or needs. You may wish to speak to your financial adviser, or seek professional advice before you consider making any changes or cancelling your cover. Making changes to a policy may impact such things as the benefit payable, the claim you can make or waiting period. Insurance cover may have different features, which if altered may impact the premium.

3. The Australian Prudential Regulation Authority (APRA) has required life insurers to, with effect from 1 October 2021, have controls to manage the risks associated with long benefit periods. Accordingly, if you reduce your benefit period, you may not be able to increase the benefit period.

4. The Australian Prudential Regulation Authority (APRA) has mandated for all insurers to cease the sale of Agreed Value and Endorsed Agreed Value policies from 31 March 2020. If you do decide to reduce your premiums by switching the benefit type from Agreed Value to Indemnity, then you cannot change it back again if you or your financial adviser changes their mind later.

5. The premium reduction stories are illustrative only and do not represent actual events or people. The claims stories are based on real life claims but altered to protect the customer identities. The stories illustrate the potential risk of policy cancellation and the nature of the claims service provided, but not the type of claim that can be made on all policies.

6. Past claims payment statistics are not an indicator of future claims payments. BT’s life insurer, Westpac Life Insurance Services Limited ABN 31 003 149 157 AFSL 233728 (WLISL), paid $491,812,653 in claims during the WLISL’s 2021 financial year (i.e. October 2020 to September 2021 inclusive). Figures have been rounded to the nearest $100,000 and are based on the total amount paid during the WLISL’s financial year. Please note that these figures exclude claims paid for Westpac Group Plan insurance policies.