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Personal / Insurance / Loan Protection / Automatic Continuation of Cover

Automatic Continuation of Cover

Loan Protection policies with a policy start date before 17 May 2010 have an additional feature called Automatic Continuation of Cover, which continues to protect you after your loan closes.

Your policy anniversary letter will confirm if your Loan Protection policy has this feature.

Reviewing your policy once it enters the Automatic Continuation of Cover phase?

  • As your policy will continue after your loan closes, it’s important to consider if your policy is right for your personal circumstances and whether you already have other existing insurance cover, such as through your superannuation fund, for unemployment, terminal illness and death.

    If you choose to cancel your cover and replace it with another policy, you may be required to go through underwriting, medical checks or be subject to pre-existing condition exclusions.

    If you don’t do anything, your policy will continue and you will pay ongoing insurance premiums.  Please take the time to read the information below to help you to decide whether to continue your policy.

    If after reading the information you have any questions, or you would like to cancel your policy, you can:

How does it work?

  • Once your loan is closed, your Loan Protection policy automatically continues without any request for evidence of health. Your cover is now in the Automatic Continuation of Cover phase. This means that you will continue to be protected.

    Previously your policy provided cover that could help you pay off your loan if the unexpected happened. Under Automatic Continuation of Cover when you make an eligible claim the benefits will be paid directly to you or your estate.

    The amount you pay per month and the events your policy protects you against, have not changed. 

What you’re covered for

The table below summarises the benefits and conditions of the Automatic Continuation of Cover feature. 

Refer to the latest Home Loan Protection Product Disclosure Statement (PDS) or the latest Personal Loan Protection PDS  and your Policy Schedule to check the benefits for which you are covered and if you are eligible to claim.

It is important to note that your benefits and conditions have been upgraded over time. You can find earlier versions of the PDS here. Should you make a claim, we will assess it against the original benefit or condition and the upgraded benefit or condition. If your claim is admitted, the claim paid will be based on the benefit or condition that is most advantageous to you (original or upgraded). If you think that an earlier benefit or condition is more advantageous to you then you can also claim under that term.


 
Out of Work Cover
(also known as Loan Repayment Cover)
Critical Illness Cover
(also known as Loan Cover)
Life Cover
(also known as Loan Cover)
What you’re covered for
We could help you get back on your feet by paying up to 75% of your average monthly income for up to 12 months, if you can’t work because of:
  • injury
  • illness or
  • involuntary unemployment 
If you’re diagnosed with a critical illness, we could pay a lump sum cash benefit directly to you.  Critical Illness cover conditions include: 
  • cancer
  • coronary 
  • artery bypass surgery
  • heart attack 
  • stroke
These conditions have specific meanings and a benefit is only payable if you meet the precise meaning of the definition set out in the Loan Protection Medical Definitions Reference Guide. 
Life Cover could pay a lump sum benefit to your estate if you pass away. It could also be paid directly to you if you’re diagnosed with less than 24 months to live.
When does your policy end?
  • The policy anniversary date before your 65th birthday; or
  • When we pay a death or terminal illness claim
  • The policy anniversary date before your 65th birthday; or
  • When we pay a death or terminal illness claim
  • The policy anniversary date before your 65th birthday; or
  • When we pay a death or terminal illness claim
What benefit could I receive if I claim?
If you are eligible, your policy will pay a monthly amount equal to 75% of your average monthly income in the twelve months immediately prior to claim.
If you are eligible and you had a policy covering a home loan, this benefit will pay an amount equal to 10% of your “maximum death and terminal illness benefit”.

If you are eligible and you had a policy covering a personal loan this benefit will pay an amount equal to your “maximum death and terminal illness benefit”.
If you are eligible, your policy will pay an amount equal to your “maximum death and terminal illness benefit”.  You can find this amount on your Policy Schedule.

The amount paid will be less any Critical Illness Cover benefits already paid.
What is the maximum amount we will pay?
If you are eligible and you had a policy covering a home loan, the maximum monthly amount we will pay is 0.67% of your “Loan Repayment Cover” cap amount. You can find this amount on your Policy Schedule.

If you are eligible and you had a policy covering a personal loan, the maximum monthly amount we will pay is 2% of your “Loan Repayment Cover” cap amount. You can find this amount on your Policy Schedule.
$75,000
$750,000
How are the benefits paid?
For each claim event, you will be paid monthly, for up to 12 months.
One lump sum payment.
One lump sum payment.

Examples of how benefits are calculated. Please check your Policy Schedule to confirm the benefits that apply to you.

For a policy that covered a Personal Loan:

James took out a Personal Loan for $35,000 on 15 March 2009 and chose to take out Loan Protection to help cover the outstanding loan amount or monthly repayments in the event of an eligible claim. After paying off his Personal Loan, his Loan Protection policy entered the Automatic Continuation of Cover phase. James maintained the same level of cover for the duration of the policy.

During the Automatic Continuation of Cover phase of the policy, the following benefits may be payable.

  • In the event of Death or Terminal Illness, a lump sum benefit of up to $35,000 (less any Critical Illness payments)
  • In the event of Critical Illness condition, a lump sum benefit of $35,000
  • In the event of an illness, injury or involuntary unemployment, a monthly benefit of 75% pre claim monthly income up to $700 per month (2% of Loan Repayment Cover Cap [$35,000])

For a policy that covered a Home Loan:

Scott and Sally took out a Home Loan for $300,000 on 10 June 2008 and chose to take out Loan Protection to help cover the outstanding loan amount or monthly repayments in the event of an eligible claim. After paying off their Home Loan, the Loan Protection policy entered the Automatic Continuation of Cover phase. Both Scott and Sally maintained the same level of cover for the duration of the policy.

During the Automatic Continuation of Cover phase of the policy, the following benefits may be payable for both Scott and Sally.

  • In the event of Death or Terminal Illness, a lump sum benefit of up to $300,000 (less any Critical Illness payments)
  • In the event of Critical Illness condition, a lump sum benefit of $30,000 (10% of the Life Cover)
  • In the event of an illness, injury or involuntary unemployment, a monthly benefit of 75% pre claim monthly income up to $2,010 per month (0.67% of Loan Repayment Cover Cap [$300,000])

FAQs

  • Can you claim?

    Loan Repayment Cover

    If you are unable to work due to disability or involuntary unemployment, your policy could pay you a monthly amount for up to 12 months.

    To make a successful claim, you must be:

    • Unable to work due to disability or involuntary unemployment
    • Permanently employed, self-employed or employed under a fixed term contract for at least 90 consecutive days
    • Working an average of 15 hours per week (does not apply for permanent employees); and
    • Not working in employment that is seasonal in nature

    Loan Cover

    To make a successful claim, you:

    • Must be medically certified as terminally ill; or
    • Must be diagnosed with a Critical Illness Condition: Critical illness conditions cover coronary artery disease requiring bypass surgery, heart attack, stroke and cancer. Not all cancers and medical conditions are covered
    • Must meet the medical definition for cancer, coronary artery disease requiring bypass surgery, heart attack or stroke that are set out in the Product Disclosure Statement and the Loan Protection Medical Definitions Reference Guide; or
    • Must pass away

    You need to meet the above criteria before claiming.  If you are unsure or you need help with understanding the above criteria please call us on 13 39 82 between 9am-5pm, Mon - Fri (AEST/AEDT).

  • How will I know when the Automatic Continuation of Cover commences?

    After your loan is closed we will send you a notification to let you know that this feature of your policy has commenced. You will also continue to receive a policy anniversary letter every year. 

  • What are your options?

    When the Automatic Continuation of Cover phase commences, you can:

    • Do nothing and continue your policy.  You will be covered for the same events and be required to pay the same monthly premium
    • Contact us to cancel or discuss your cover options on 13 39 82 (9am-5pm, Mon - Fri (AEST/AEDT))

    Your existing monthly premium has not changed as a result of closing your loan.

    You should consider if your policy is right for your personal circumstances, including whether this cover complements any other existing insurance cover.

    If you decide that you no longer need this cover now that your loan is closed it is important to remember that:

    • You will not be able to make a claim for an event that occurs after the policy is cancelled
    • If you need to take out insurance cover in the future, limitations and conditions may apply based on your personal situation, such as your health

Things you should know

  • This advice has been prepared without considering your objectives, financial situation or needs. Before acting on the advice, please consider its appropriateness to your circumstances. Loan Protection is issued by AIA Australia Limited ABN 79 004 837 861, AFSL 230043 (AIA Australia). AIA Australia is not part of the Commonwealth Bank of Australia (CBA) Group of companies. CBA and its subsidiaries do not guarantee the obligations or performance of AIA Australia or the products it offers.