INCOME PROTECTION - AAMI

ContentsImportant information 1About AAMI Income Protection 3Who can apply? 3Your cooling off period 4What we cover 5When cover starts 11When cover stops 11What we do not cover 12Taxation 13Your premium 13Risks 16How can I apply? 17How to make changes to your policy 17Making a claim 17Commission 18Complaints resolution 18Alternative remuneration register 18Your privacy is important to us 19Your Duty of Disclosure 19What do we mean by that? 21i

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Important informationYour AAMI ProductDisclosure StatementThe AAMI Income Protection policyThis is the Product Disclosure Statement (PDS) for AAMIIncome Protection. AAMI Income Protection and thisPDS are issued by Suncorp Life & Superannuation LimitedABN 87 073 979 530 AFSL 229880 (Suncorp).AAI Limited ABN 48 005 297 807, AFSL 230859trading as AAMI does not provide any financial productadvice in relation to AAMI Income Protection anddoes not issue, guarantee or underwrite AAMI IncomeProtection.Suncorp and AAMI are related bodies corporateof Suncorp-Metway Limited ABN 66 010 831 722(Suncorp-Metway). Various products and services areprovided by different entities in the Suncorp Group.The different entities of the Suncorp Group are notresponsible for, do not guarantee and are not liablein respect of products and services provided by otherentities in the Suncorp Group. Suncorp-Metway doesnot guarantee and is not liable for AAMI IncomeProtection. This product is not a bank deposit or otherbank liability.AAMI Income Protection is not a savings plan. Forfull terms and conditions, please refer to the policyissued by Suncorp. You can request a copy from usfree of charge.All the information contained in this PDS is current at thetime of issue. We may change or update informationfrom time to time. If the change is a material orsignificant one, we will generally notify you within 3months of the change occurring. If the change is not1

materially adverse, we may notify you about thatchange by preparing an update on our website,www.aami.com.au/incomeprotection. You canalso obtain a printed copy of this free of chargeby contacting us (please refer to the back page fordetails).We may also make improvements to your policywithout any increase to your premium. If we makea change to your policy which in your opinion wasadverse to you, we will, if you make a claim, assessyour claim on the terms of the policy before the changetook place.Before you buy this insurance, please read thisPDS carefully, including What we do not cover onpage 12. Any information contained in this PDShas been prepared by Suncorp without takinginto account your particular objectives, financialsituation or needs. For that reason, before actingon the information, you should consider theappropriateness of the information in regards toyour own circumstances.For details on how to contact us, please refer to theback page.When reading this PDS, please refer to What dowe mean by that? on pages 21-25 which shows themeaning of various terms used throughout.This PDS was completed on 10 April 2013.This PDS is effective 1 July 2013.2

About AAMI IncomeProtectionAAMI Income Protection is designed to provide anaffordable way to help keep your life on track whileyou are suffering a disability. It pays a monthly benefitif you become disabled due to sickness or injury –helping you and your family focus on your recovery.Here are some great reasons to choose AAMI IncomeProtection. For full details, please refer to pages 5-151. You can apply for a monthly benefit of up to$10,000 without any medical tests.2. Monthly or annual premiums are available to suityour budget.3. You choose the benefit period that suits yourcircumstances; either 1 or 2 years.4. The Waiver of Premium Benefit means you won’thave to pay your premiums while you are receivingbenefit payments under your Income Protectionpolicy.5. The Automatic Indexation Benefit helps keep yourcover in line with your income.Who can apply?You can apply for AAMI Income Protection if you:are aged between 18 and 60 (inclusive);are an Australian citizen or permanent resident ofAustralia;are working at least 20 hours per week in yourprimary occupation; andreceived this PDS in Australia.3

What we coverIncome Protection provides flexible cover that youcan choose to suit your needs. Income Protection isprimarily designed to help you keep your life on trackwhile you are suffering a disability.Your Income Protection policy has a 30 day waitingperiod before a benefit is payable. The waiting periodis the period of time that must elapse during which amonthly benefit will not be paid. The waiting periodstarts on the date you consult a registered doctor forthe sickness or injury giving rise to your claim andwhen you ceased all work due to that sickness orinjury. Payments are made monthly in arrears after theend of the waiting period.Choosing your monthly benefitYou can choose to insure up to 75% of your monthlyincome; from as little as $1,000 per month, up to$10,000 per month.The most we will pay under your AAMI IncomeProtection policy is the monthly benefit or 75% ofyour pre-disability income, whichever is less. Themaximum amount we will pay across all IncomeProtection policies issued by us for the same insuredperson is 75% of your monthly pre-disability incomeor $10,000 per month (plus indexation), whicheveris less.5

What happens if you are on leave orunemployed at the time of your disability?If you have been unemployed or on annual, longservice, maternity, paternity or sabbatical leave forless than 12 months at the time of your disability, yourpre-disability income will be calculated based on youraverage monthly income during the 12 consecutivemonths prior to commencing unemployment, annual,long service, maternity, paternity or sabbatical leave.If you have been unemployed or on annual, longservice, maternity, paternity or sabbatical leave formore than 12 months at the time of your disability, themonthly benefit will not be payable.What happens if you are overseas at thetime of your disability?If you are overseas at the time of your disability or atany time while you are disabled, your monthly benefitwill only be payable for a maximum of 2 months whileyou are overseas, but will continue when you returnto Australia so long as an event has not occurred thatceases payment of your monthly benefit (other thanbeing overseas).Benefit limitationsIncome Protection replaces up to 75% of your monthlyincome which has ceased because of your disability,however there are some circumstances when themonthly benefit payable to you may be altered orreduced.The monthly benefit amount payable to you will berecalculated if, in relation to the sickness or injury whichcaused your disability, you receive other payments byway of:other disability, group, sickness or accidentinsurance cover, including a mortgage replacementpolicy or through a superannuation fund;8

workers’ compensation schemes;accident compensation schemes; orother statutory insurances payable for loss ofincome.If any of the other payments listed above are receivedin the form of a lump sum in compensation for loss ofearnings, we will convert that part of the compensationto income on the basis of 1% of the loss of earningscomponent and reduce the monthly benefit amountpayable to you by that component.In the event of a claim, the monthly benefit amountpayable will be the lesser of:75% of your pre-disability income (reduced by any‘other payments’); andthe monthly benefit.Recurring disabilityIf you suffer from the same or related sickness or injurywithin 6 months of your last monthly benefit beingpayable, and you continue to be disabled, we willconsider your disablement as recurring and thereforewill recommence claim payments without applying anew waiting period.This means we will continue your monthly benefitpayments and we will keep paying you while youremain disabled. Any payment made will be added tothe original claim period to ensure the maximum benefitperiod is not exceeded.Unless you make a full recovery, no monthly benefit willbe payable for the same or related sickness or injuryfor which the previous claim was paid in full, i.e. for theentire benefit period9

Waiver of Premium BenefitIf we are paying you a monthly benefit while youare disabled, we will waive your Income Protectionpremiums for the proportion of the period while youare on claim.The waiver does not apply to premiums paid duringthe waiting period. The Waiver of Premium Benefit willend on the earliest of:the end of your benefit period;the date you are no longer disabled; orthe date your policy ends.Automatic Indexation BenefitTo help keep your insurance in line with your income,we will automatically increase your monthly benefiteach year on your policy anniversary by the greaterof the indexation factor or 5%. Unless you decline theincrease, we will recalculate your premium to reflect theincrease as a result of the indexation factor (and yourage) and we will advise you of your new premiumprior to your policy anniversary.The Automatic Indexation Benefit will not apply if youare receiving monthly benefit payments from us underthis policy.Given AAMI Income Protection replaces up to 75%of your lost monthly income, you need to checkthat the increase to your monthly benefit, after theindexation factor has been applied, does not resultin your cover exceeding this maximum.Refer to Benefit limitations on page 810

When cover startsAs long as you satisfy the eligibility requirements(please refer to Who can apply? on page 3) coverwill commence on the date we have accepted yourapplication and received correct payment details.Once we accept your application for cover underAAMI Income Protection, we will send you a scheduleand policy document confirming our acceptance.These documents together set out the full terms andconditions of your insurance with us. Please read thesedocuments carefully and store them in a safe place.When cover stopsCover will stop under this policy on the earliest of thefollowing events:your 65th birthday;the date you ask us to cancel the policy;the date your policy is cancelled due to the nonpaymentof outstanding premiums;the date you retire; orthe date of your death.11

What we do not coverWe will not pay the monthly benefit, refund or waiveany premiums under your policy if the event giving riseto the claim, directly or indirectly, is as a result of:12your intentional self inflicted act;you working in an occupation:at heights above 15 metres;underground in the mining industry;you attempting to engage in or engaging in:aviation or aerial pursuit activities other thanas a fare paying passenger on a commercialairline on regular scheduled flights;riding on or driving in any self-propelled vehicleengaged in any race, speed or reliability trialon any waterway, racing course, speedway orracing track;mountaineering, abseiling, rock climbing orcanyoning;diving to a depth of 45 metres or more, potholediving, wreck diving or diving in a cave.the use of drugs, other than medication prescribedby a registered doctor and taken as directed;being under the influence of alcohol, where yourblood alcohol content is over the prescribed legallimit for driving;any mental disorder or mental illness;pregnancy, miscarriage or childbirth, unlessdisability continues for more than 3 months fromthe later of the date the pregnancy finishes and thedisablement starts (the later date being the date wewill consider your disablement to have started); oryou engaging in any criminal activity.No benefit will be payable for any period you areincarcerated.Please also refer to Benefit limitations on page 8.

TaxationThe tax treatment of Income Protection will dependon your individual circumstances. If you are working,premiums are usually tax deductible and any benefitpayments received are assessable for tax purposes.These comments are a guide only and do nottake into account changes in taxation laws or yourparticular circumstances. Please ask your tax adviseror the Australian Taxation Office about your owncircumstances.Your premiumYour premium pays for your cover, government feesand charges and administration costs.You can choose to pay your premium monthly orannually from the financial institution or credit card younominate and you have up to 14 days (or 30 days ifyou pay monthly) from the date each premium is due topay your premium. If you do not pay a premium withinthis period, we will send a notice to you at the addresslast advised to us specifying the date we will cancelthe policy without any refund of premium. We will notbe liable for any claims after the date of cancellation.If we cancel your policy due to non-payment ofpremiums, you can contact us to reinstate your policyup to 30 days after the date of cancellation. In orderfor us to process your reinstatement, we may ask forinformation relating to (but not limited to) your healthand occupation and all outstanding premiums must bepaid by you.Your premium is guaranteed not to change for 12months from your policy commencement date. Afterthis period, your premium will generally increasewith age and as a result of the Automatic IndexationBenefit explained on page 10. We can also changethe premium rate for all policies of the same kind byproviding you with at least 30 days written notice.13

You will be charged the new premium from your nextpolicy anniversary.Premiums received are paid into our No. 1 Statutoryfund. A policy issued in relation to AAMI IncomeProtection does not participate in any surplus arising inour statutory funds.Are you eligible for a discount?Large Monthly Benefit DiscountWith the Large Monthly Benefit Discount, the higher themonthly benefit you choose, the larger the discount thatapplies to your policy. The following table shows howthe discounts will be applied:Monthly benefit range$1,000 - $2,499 NilDiscount$2,500 - $4,999 10%$5,000 - $6,999 20%$7,000 - $9,999 25%$10,000 or above 30%How to calculate your premiumYour premium is based on the applicable premium ratemultiplied by your monthly benefit. Your premium rateis based on your age, gender, smoking status, level ofmonthly benefit, benefit period and occupation class ofyour primary occupation.The following tables provide you with a sample ofmonthly premiums only. For a personalised quote,please contact us on 13 22 44 or go towww.aami.com.au/incomeprotection.14

Sample premiums for malesOccupationMonthlybenefitBenefitperiodMonthlypremiumAge 30NonsmokerAdminclerkAge 35NonsmokerCarpenterAge 45NonsmokerDoctor$3,500 $4,000 $5,0001 Year 1 Year 1 Year$30.29 $64.17 $48.82Sample premiums for femalesAge 30NonsmokerAge 35NonsmokerOccupation Receptionist Retail shopassistantMonthlybenefitBenefitperiodMonthlypremiumAge 45NonsmokerAccountant$3,500 $3,000 $5,0001 Year 1 Year 1 Year$41.87 $61.24 $71.88The premiums in these tables are a sample only asnot all ages or monthly benefits are represented. Thepremium which applies to you may differ dependingon your own circumstances. These tables do notinclude any renewal premiums.15

RisksYou should be aware of the risks involved beforebuying any life insurance policy. Some of the risksassociated with holding this life insurance policyinclude:your policy may not suit your needs;your monthly benefit may be insufficient orexcessive;a monthly benefit may not be paid in the event ofa claim if an exclusion applies;a monthly benefit may not be paid if in the eventof a claim, you failed to disclose all information aspart of the application process; orthe monthly benefit may be reduced or not payableat all if in the event of a claim, any benefit offsetsapply.It’s important that the policy meets your needsboth now and in the future. You may need to seekassistance from an adviser if the terms are notconsistent with your needs or do not suit your personalcircumstances.16

How can I apply?You can apply for AAMI Income Protection in one oftwo ways:calling 13 22 44 where you will always speak to areal person 7 days a week.visiting www.aami.com.au/incomeprotection andcomplete an online application.However you choose to complete your applicationfor AAMI Income Protection, you won’t be requiredto undergo any blood tests or medical examinations.We will assess your occupation and health based onthe information you provide to us in your application.Depending on the information you provide, we may onsome occasions have to contact you with one or twoadditional questions that we need answered. If this isthe case one of our trained underwriters will call you toconfirm your details.How to make changes to your policyIf you would like to make any changes to your policy,for example to adjust your monthly benefit, changeyour address or your payment type, please contact us.We will confirm in writing any changes to your policy,including any impact the change may have on yourpremium.Making a claimIf entitled to make a claim, you or your legal personalrepresentative will need to contact us on 13 22 44, assoon as possible after the event giving rise to the claim.Full details about what information you need to provideis outlined in the claim pack we send to you.17

CommissionThe premiums you pay take into account anycommissions or administration fees payable so itis not an additional charge to you. The amount ofcommission and administration fees may vary andcould be up to 100% of your first year premium(excluding government charges).Complaints resolutionIf you have a complaint about this product or ourservices, we have established a complaints resolutionprocess and are committed to working with you toresolve your concerns. You can call us on 13 22 44 orwrite to AAMI Life Customer Service GPO Box 3950,Sydney, NSW, 2001.If you are not satisfied with our decision or the waywe handled your complaint, you can contact theFinancial Ombudsman Service Limited (FOS)(ABN 67 131 124 448). FOS is an independentand impartial body who will deal with your complaintdirectly or follow up the matter on your behalf inaccordance with its terms of reference. You can contactFOS by phone on 1300 780 808 or write to FinancialOmbudsman Service, GPO Box 3, Melbourne Victoria3001 or fax on 03 9613 6399.Alternative remuneration registerAll payments made or received by us will be inaccordance with the Financial Services Council (FSC)Industry Code of Practice. We keep a register of thesepayments which you can view by contacting us on13 22 44.18

Your privacy is important to usAAMI and Suncorp are members of the SuncorpGroup Limited. As a Group, we comply with theAustralian privacy laws.Once we accept your application for AAMI IncomeProtection, you will receive a full copy of our PrivacyStatement in your policy document.We also like to use and disclose your personalinformation to keep you up to date with the rangeof products and services available from the SuncorpGroup Limited. Generally, the companies in our Groupwill use and disclose your personal information forthe purpose of marketing other products and servicesof third parties we think may be of interest to you. Ifyou do not want us to use and disclose your personalinformation for these marketing purposes, pleasecontact us and tell us.Your Duty of DisclosureBefore you enter into a contract of life insurance withan insurer, you have a duty, under the InsuranceContracts Act 1984, to disclose to the insurer everymatter that you know, or could reasonably beexpected to know, that is relevant to the insurer’sdecision whether to accept the risk of the insuranceand, if so, on what terms.Your duty, however, does not require disclosure ofa matter:that diminishes the risk to be undertaken by theinsurer;that is of common knowledge;that your insurer knows, or in the ordinary course oftheir business, ought to know;as to which compliance with your duty is waivedby the insurer.19

Non-disclosure – If you fail to comply with your dutyof disclosure and the insurer would not have enteredinto the contract on any terms if the failure had notoccurred, the insurer may avoid the contract within3 years of entering into it. If your non-disclosure isfraudulent, the insurer may avoid the contract at anytimeAn insurer who is entitled to avoid a contract of lifeinsurance may, within 3 years of entering into it, electnot to avoid it but to reduce the sum that you havebeen insured for in accordance with a formula thattakes into account the premium that would have beenpayable if you had disclosed all relevant matters to theinsurer.This duty of disclosure commences on the date youapply for cover and continues to apply until theinsurer notifies you that the risk has been accepted.It also applies when you extend, vary or reinstate acontract of life insurance.20

What do we mean by that?Where any words appear in this PDS, whether thefirst letter is in upper or lower case, their meanings arelisted below.Where applicable, with respect to the definitions,singular includes the plural and vice versa.Benefit period means the maximum period of timeduring which payment will be paid. The benefit periodwill start on the date immediately after the expiry of thewaiting period for the sickness or injury giving rise toyour Income Protection claim.Criminal activity means any crime for which youare convicted where you could receive a custodialsentence, whether or not you do in fact receive acustodial sentence for that crime.Disabled, Disablement or Disability means that solelydue to sickness or injury you are:unable to perform all the important incomeproducing duties of your primary occupation;not working whether remunerated or not; andunder the care, treatment and following the adviceof a registered doctor.Expiry date means the date your policy ends as statedon your policy schedule.Full recovery means for a continuous period of 6months, you have returned to work and you have:performed all the important income producingduties of your primary occupation;not been suffering from the sickness or injury youwere previously claiming for;not required or received advice, care or treatmentfrom a registered doctor for the sickness or injuryyou were previously claiming for; andnot been receiving Disability Benefit payments.21

Important income producing duties means thoseduties which could reasonably be considered primarilyessential to producing your monthly income.Indexation factor means the percentage change inthe consumer price index (CPI) which is the weightedaverage of the 8 Australian capital cities combined aspublished by the Australian Bureau of Statistics or anybody which succeeds it and in respect of the 12 monthperiod finishing on 30 September.The indexation factor will be applied from 1 March thefollowing year. If the CPI is not published by this date,the indexation factor will be calculated upon a retailprice index which we consider most nearly replaces it.Injury means physical damage to your body whichoccurs as a result of violent, external and visible meanswhile this policy is in force.Insured person means the person who has beenaccepted by us and is listed on your policy scheduleas the insured person under the policy.Legal personal representative means any person(s)who is authorised by law to administer and distributeyour estate or act on your behalf.Mental disorder or mental illness means any fatiguedisorder, motivational disorder or mental healthdisorder as defined in the American PsychiatricAssociation, Diagnostic and Statistical Manual ofMental Disorder, Volume IV (or as amended). Theseinclude but are not limited to depressive disorders,anxiety disorders, adjustment disorders, somatoformdisorders, psychotic disorders, bipolar disorders,personality disorders, Attention Deficit HyperactivityDisorder or any complications thereof.22

Monthly benefit means the amount you apply forunder the AAMI Income Protection cover and weaccept as varied by agreement (for example if youapply for a decrease or through increases underautomatic indexation).In the event of a claim, the amount payable will be thelesser of:75% of your pre-disability income (reduced by any‘other payments’ listed under the heading Benefitlimitations on page 8); andthe monthly benefit.Monthly income means the income earned eachmonth from your primary occupation by your ownpersonal exertion. Monthly income is your totalremuneration package including:salary;wages;reportable fringe benefits;regular commissions;regular bonuses;overtime payments; andsuperannuation contributions.If you are a self-employed person who has ownershipinterest in the business which is operating as a soletrader or under a partnership, company and/or truststructure (including an employee of your own companyor trust), the monthly income is your share of the netincome before tax of the business (your share ofbusiness income less business expenses), directly dueto your personal exertion. Business expenses include(but are not limited to) motor vehicle expenses anddepreciation.23

Monthly income does not include:income that you will continue to receive from yourbusiness, even if you are unable to work, includingany ongoing profit generated by other employeesof the business;other unearned income such as dividends, interest,rental income or proceeds from the sale of assets;income from occupations other than your primaryoccupation; orongoing trailing commission or royalties.Policy document means the document issued by uswhich, together with your policy schedule, constitutesthe full terms of your Income Protection policy with us.Policy means your Income Protection cover, whichconsists of the policy document, schedule andinformation provided in your application.Policy anniversary means the anniversary of yourpolicy commencement date.Policy commencement date means the date as shownon your schedule.Policy owner means the person listed on the policyschedule as the owner of this policy.Pre-disability income means your average monthlyincome during the 12 consecutive months before thestart of your disablement from your primary occupation.Premium means the amount you pay us for theinsurance.Primary occupation means the occupation in whichyou were predominantly engaged immediately priorto becoming disabled or if you were unemployed atthe time of disablement, the occupation in which youwere predominantly engaged immediately prior tounemployment.24

Registered doctor means a doctor who is legallyqualified and properly registered in Australia. Thedoctor cannot be you or an immediate member of yourfamily (e.g. partner, parents, siblings or children).If practising outside Australia, the doctor must havequalifications equivalent to Australian standards andapproved by us.A registered doctor could be your general practitioneror treating medical specialist.Schedule means a document issued by us whichshows important information about your policy,including your policy number, premiums, specialconditions (if applicable), your policy commencementdate and your expiry date.Sickness means an illness or disease you suffer whilethis policy is in force.Waiting period means the period of time that mustelapse during which a benefit will not be paid.The waiting period starts on the date you consult aregistered doctor for the sickness or injury giving rise toyour claim and when you ceased all work due to thatsickness or injury.We, us and our means Suncorp Life & SuperannuationLimited ABN 87 073 979 530 AFSL 229880.You and your means the policy owner who is also theinsured person who has been accepted by us and isshown on the policy schedule25

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A03246 01/07/13 AWe’re here to help you24 hours a day7 days a week13 22 44aami.com.au1300 850 394AAMI Life Customer ServiceGPO Box 3950, Sydney, NSW, 2001AAMI Life Insurance is issued by:Suncorp Life & Superannuation LimitedABN 87 073 979 530, AFSL 22988036 Wickham TerraceBrisbane QLD 4000