AIA Involuntary Unemployment Insurance
AIA Repayment Relief Benefit – Protect your Mortgage with Involuntary Unemployment Insurance
The AIA Repayment Relief benefit is designed to help homeowners meet their mortgage repayments if they find themselves involuntarily unemployed or made redundant. The benefit was introduced by AIA in December 2019 as an extra cost option which can be added to new Priority Protection Life and/or TPD insurance policies.
In June 2019 Australians had the third lowest savings to household income ratio amongst G20 countries. Research by CBA Analytics has also observed that 37% of Australians say they could not handle a major unexpected expense.
There are therefore many Australians with limited savings to help them cover their mortgage repayments if they found themselves without a job. Given that Income Protection policies offer limited Involuntary Unemployment Insurance options, AIA Repayment Relief offers an alternative way of protecting against job loss.
What is covered by the AIA Repayment Relief benefit?
If you have been employed for at least 180 days and then are involuntarily unemployed for more than 60 days (the Waiting Period), the AIA Repayment Relief benefit will pay a monthly benefit equal to your minimum monthly home loan repayment (up to a maximum of $7,500). Payments will continue for up to 90 days while you remain involuntarily unemployed and as long as you are actively seeking employment and registered with an employment agency.
The minimum monthly home loan repayment amount is agreed with AIA at the start of the policy (evidence will need to be provided at time of application) and this will not change for the life of the policy. However if your minimum monthly home loan repayment changes you are able to apply for an increase or decrease.
The Repayment Relief benefit can be paid up to four times under this option, however after each payment you must have returned to employment for at least 180 days before being able to claim again.
An additional benefit is that should you die or become terminally ill at any time while this option is in force an amount will be paid to you or your estate equal to three times your minimum monthly home loan repayment.
What is considered Involuntary Unemployment under this benefit?
You will be “Involuntary Unemployed” under this benefit if, due to no choice or fault of your own and due to factors outside your control, you are no longer in employment or working in an occupation that generates income in Australia.
What will NOT be considered Involuntary Unemployment?
No benefit will be provided for any period of involuntary unemployment starting within the first 180 days of the policy or occurring while working outside of Australia.
No benefit will be paid for unemployment suffered as a result of:
- An unsuccessful probation period
- The end of a period of casual, seasonal or temporary work
- The end of a fixed term contract or specified period of work
- Dismissal due to unsatisfactory performance
- Deliberate or serious misconduct
- Loss of licence to perform some or all of the duties of your occupation
- Voluntary redundancy
- Early retirement
- Abandonment of employment
- Intentional or self-inflicted injury
Also not covered is a temporary shutdown of your workplace (e.g. in reaction to the coronavirus) which does not result in the permanent termination of your employment.
Who is eligible to apply for this benefit?
The Repayment Relief benefit is only available as an add-on option to a new AIA Priority Protection Life and/or TPD insurance policy, either non super or super. The benefit cannot be purchased as a Stand Alone benefit.
In order to apply for this benefit you will need to:
- Be applying for an AIA Priority Protection Life and/or TPD insurance policy
- Be a permanent full time or part time employee
- Be residing and working in Australia
- Have an owner-occupied home loan/mortgage from an Australian licenced loan provider
- Not working in one of the excluded occupation categories (mainly unskilled workers performing heavy manual work)
Unfortunately, self employed persons are not eligible for this benefit. This includes being an employee of your own company or a business in which you have an ownership interest, a partner in a partnership or a trustee or a trust, or an employee of any immediate family member.
How much does the Repayment Relief Benefit cost?
You can use Compare Quotes to find out the cost of an AIA Priority Protection Life and/or TPD insurance policy which includes the Repayment Relief option – just enter your monthly mortgage repayment amount along with your Life and/or TPD cover amounts. Or if you need help Contact Us.
The cost of the Repayment Relief option varies according to the size of your minimum home repayment. Indicative costs (based on an Accountant living in Victoria as at 23rd March 2020)
|Minimum Home Repayment||Monthly Cost of Repayment Relief option|
If your AIA Priority Protection Life and/or TPD insurance policy is being paid for by a super rollover or by your Self Managed Super Fund (SMSF), you can link this option to your policy, but the premium for the Retirement Relief benefit will need to be paid by you personally.
If you are unsure if this option suits your personal situation, please obtain personal advice from one of our qualified advisers by completing our online Fact Find at Get Advice.