ING delays premium increases till Oct

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ING Life will not increase yearly renewable term premiums until personal tax rate cuts come into force on October 1.

Thursday, June 3rd 2010, 4:20PM 2 Comments

by Jenha White

ING Life managing director Jeremy Nicoll says ING believes it is prudent to hold off increasing premiums until policyholders have the benefit of post-tax income.

As a result ING Life will initially absorb the cost of additional tax payable on new life benefits issued from July 1 to September 30.

Life cover with level premiums fixed to age 65 and 80 however, will see a 23% premium increase from July 1.

Nicoll says in late June ING will provide the full details of all the changes it intends to make.

"There are many different options to consider with the new tax changes and we want to ensure that our approach is fair for policyholders and advisers."

ING technical development manager Steve Wright says there are a lot of different options to consider such as whether premiums are ramped up on affected policies, or all policies so that affected policy premiums don't go up too much and also whether to touch adviser commissions.

"We're taking our time to do it right and to make sure there is not too much of a burden on anyone.

"All insurance companies are faced with an increase and we've got to make sure it's distributed fairly, that it makes sense and that it helps with affordability," says Wright.

Nicoll also says the change in life tax treatment and the increase in GST will mean an increase across all policies is inevitable.

He says ING's intention is to ‘bundle' the changes rather than releasing some now and others in October.

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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