Pinnacle says no justification for some premium increases

Pinnacle Life calculates that insurers will need to increase life insurance premiums by around 20% on new policies sold from July 1 to neutralise the effect of the tax change on bottom-line profitability. 

However no insurer has made increases of this magnitude.

Pinnacle Life partner Ed Saul says Pinnacle plans to increase prices on new policies by 10% from July 1, followed by several small increases of less than 3% over the next three years until margins are restored to previous levels.

"Pinnacle Life will honour its commitments to all existing policyholders who have already been told what their premiums will be for the next five years and whose policies fall under the grandfathering provisions of the new legislation," he says.