AIA Premium Up 40%: A NSW IT Professional's Insurance Case Study
- 5 hours ago
- 10 min read
Written by Christopher Hall, AdvDipFP | Authorised Representative, AFSL 526688 | Updated March 2026
In early 2026, Terry — a computer technician based in New South Wales — received an annual renewal notice from AIA showing his life and TPD insurance premiums increasing from $5,637 to $7,885 per annum: a jump of $2,248, or 39.9%, in a single year. Terry holds $2,600,000 of life cover and $1,700,000 of TPD cover, both inside his self-managed superannuation fund (SMSF). Both policies were first taken out with AIA in 2019 — now in their sixth year. A professional insurance review is currently underway.
Client Snapshot
Terry is a computer technician working in New South Wales, earning above $300,000 per annum. He is married with children and carries a mortgage. Like many professionals working in technology roles — IT support technicians, systems administrators, network engineers, software developers, help desk technicians and IT consultants — Terry put quality life and TPD cover in place through his SMSF several years ago and, until this renewal notice arrived, had not had cause to question it.
His cover levels — $2,600,000 in life insurance and $1,700,000 in total and permanent disability (TPD) insurance — reflect his personal circumstances and were determined through an individual needs analysis as part of the original advice process. Every client's needs analysis is unique; the appropriate sum-insured for any individual depends on their income, debts, dependants, existing assets and personal financial position. Anyone considering whether their existing cover levels remain appropriate should seek personalised advice through a Statement of Advice from a licensed financial adviser.
Is a 39.9% Premium Increase Normal? Understanding What Drives Annual Increases
A 39.9% premium increase in a single year is at the higher end of what policyholders experience — but the underlying causes are standard across the industry. According to the Council of Australian Life Insurers (CALI) Life Insurance Statistical Report, the typical annual premium increase for stepped life insurance policies in Australia runs at 12–18%, driven by age-based repricing and CPI indexation. Terry's renewal notice sits above that range — and understanding why matters for anyone who has received a similar notice.
Two compounding factors explain the magnitude.
First, age-band repricing. Terry was born in March 1979 and is now 46, approaching 47. Stepped life and TPD premiums reprice at each annual age bracket — and the mid-to-late 40s are a meaningful inflection point in the pricing curve. Each birthday moves the premium to the next band, and those bands become progressively steeper. This is not specific to AIA — it is a feature of stepped premium policies across every Australian life insurer, including TAL, Zurich, OnePath, MetLife, ClearView, Acenda and Neos. Any policyholder on a stepped premium structure will experience this effect as they age.
Second, a TPD repricing event. AIA has conducted a significant repricing of existing TPD policies across all age groups — not just for Terry, but across their policy book. Again, this is not unusual in the Australian market. All major insurers periodically revise the pricing on their in-force policy books in response to claims experience, reinsurance costs and regulatory requirements. TAL, Zurich, OnePath, MetLife, ClearView, Acenda and Neos have all conducted repricing events of this kind at various points. When a policyholder receives a renewal notice, age-band repricing and a book-wide repricing event can — and do — compound in the same year.
The core point is this: premiums on stepped policies always go up. The question is not whether they increase — it is whether the increase your insurer is applying to your existing policy is competitive with what the market would offer for equivalent new cover. That is what a professional review is designed to answer, and it is what makes Terry's situation a useful reference point for anyone in a similar position.
Across more than 500 policy reviews, Christopher Hall has observed premium differences of between 30% and 60% between what existing policyholders are paying and what equivalent new-business cover costs in the current market. Individual outcomes vary depending on age, occupation, cover profile, health history and the specific insurers considered at the time of review.
What the Numbers Look Like in Detail
Terry's $7,885 annual premium breaks down as follows:
Cover type | Sum insured | Annual premium |
Life insurance | $2,600,000 | $3,780 |
TPD insurance | $1,700,000 | $3,999 |
Policy costs | — | ~$106 |
Total | $7,885 |
The TPD component is notable. At $3,999 per annum for $1,675,000 of TPD cover, the TPD annual premium is now higher than the life annual premium — an uncommon ratio that reflects both the age-band repricing and the TPD book repricing occurring simultaneously. Terry's combined annual premium has increased by 39.9% — from $5,637 to $7,885 — without any change to his cover amounts.
Why the SMSF Structure Adds a Layer of Complexity
Terry holds both policies inside his self-managed superannuation fund. This is a common and often sensible structure — annual premiums are funded from superannuation contributions, which may, depending on individual circumstances, offer tax advantages compared to holding equivalent cover outside super. A qualified accountant should be consulted regarding the tax treatment specific to any individual's situation.
However, holding insurance inside an SMSF does not mean the policy is automatically reviewed. The SMSF trustee (Terry) remains responsible for ensuring the cover remains appropriate and competitively priced. Annual renewal notices arrive, annual premiums are deducted, and without a professional review in place, the gap between what an existing policyholder pays and what the new-business market offers can widen year by year without scrutiny.
For a deeper explanation of how insurance inside superannuation works and when it makes sense, see our guide to insurance inside superannuation.
What a Professional Review Examines
A professional insurance review is not the same as cancelling a policy — and it does not commit a client to any change. What Christopher Hall's review process examines in a case like Terry's:
Current market pricing. What would equivalent cover — $2,600,000 life and $1,700,000 TPD — cost in annual premiums at new-business rates from AIA and other major Australian insurers, including TAL, Zurich, OnePath, MetLife, ClearView, Acenda and Neos?
Occupational category and pricing. Terry works as a computer technician — a desk-based, office-based role involving keyboard work. Professionals in this type of role — including IT support technicians, systems administrators, network engineers, software developers, IT consultants, office workers, administrative staff, management roles, and executives — generally fall into a favourable occupational category for insurance pricing purposes. Desk-based and office-based professionals, particularly those in roles requiring tertiary qualifications or operating at senior or executive level, are often among the more competitively priced occupational categories in the new-business market, with multiple insurers actively quoting for this type of cover. Professionals with postgraduate qualifications or in executive-level roles may attract additional premium discounts from certain insurers. That said, competitive pricing for the occupational category is always subject to the individual's personal medical history — which is assessed separately during the underwriting process.
Policy definitions and features. A lower annual premium alternative is only worth considering if the policy definitions are comparable. TPD definitions in particular vary meaningfully between insurers and between policy generations. Any comparison must account for this.
Cover adequacy. A review examines whether existing cover levels remain appropriate for the client's current financial position. This assessment is bespoke to each individual — it cannot be generalised from one client to another. For Terry, the review will consider his income, mortgage, dependants and existing assets as part of a current needs analysis, and any recommendation will be delivered through a Statement of Advice. Anyone with questions about whether their own cover levels remain appropriate should seek personalised advice from a licensed financial adviser.
SMSF structure. Whether maintaining both policies inside the SMSF remains the optimal structure, or whether a different arrangement better serves Terry's circumstances.
For a detailed explanation of what a professional policy review involves, see our article on what a professional insurance review involves.
To understand the options available when an annual premium increase notice arrives, see our guide to what to do when your life insurance premium increases.
Key Lessons from This Case
1. Annual premium increases on stepped policies are normal — but the size of the increase is worth questioning. Every policyholder on a stepped premium structure will see their annual premium increase every year. Age-band repricing and periodic insurer book repricing are standard features of the Australian life insurance market, common across TAL, Zurich, OnePath, MetLife, ClearView, Acenda, Neos and AIA alike. What a professional review examines is not whether the increase is legitimate — it is — but whether better value exists in the current new-business market for equivalent cover.
2. Age-band repricing and insurer repricing events can compound in the same year. Policyholders who are in their mid-to-late 40s and have held policies with the same insurer for five or more years are at elevated risk of a compounding increase — age-band repricing and a book-wide repricing event hitting in the same renewal cycle. An adviser can help navigate this and assess what the market looks like at the time of review. Understanding the insurance loyalty tax explains the mechanism in more detail.
3. Insurance held inside an SMSF still needs an annual review. An SMSF does not come with a built-in review mechanism. Annual premiums are deducted, cover continues, and without an adviser actively monitoring the policy, the gap between existing policy pricing and new-business market rates can widen unnoticed. Many technology professionals — system administrators, network engineers, IT consultants and developers — find their policies have not been reviewed since inception.
4. A large premium increase does not mean the policy should be cancelled. The cover Terry holds — $2,600,000 life and $1,700,000 TPD — represents years of insurability. Cancelling without a professional review in place and replacement cover confirmed risks creating an uninsured gap. A review determines whether better value exists in the market; it does not presuppose the answer.
Frequently Asked Questions
Why did Terry's AIA premium increase by 39.9% in one year?
Two factors compounded simultaneously. First, Terry's stepped annual premiums repriced at his annual age bracket — a standard feature of stepped premium policies that becomes more pronounced in the mid-to-late 40s. Second, AIA conducted a significant repricing of existing TPD policies across all age groups in their policy book. This type of book repricing is a standard industry practice, not specific to AIA — TAL, Zurich, OnePath, MetLife, ClearView, Acenda and Neos all reprice their in-force books periodically. Neither factor alone typically produces a 39.9% increase; together, they do.
Is a 39.9% life insurance premium increase normal in Australia?
It is at the higher end of what policyholders typically experience in a single year. According to the Council of Australian Life Insurers (CALI) Life Insurance Statistical Report, the typical annual increase for stepped life insurance policies runs at 12–18%. Terry's increase reflects the combination of age-based repricing and a TPD book repricing event occurring in the same renewal cycle. The increases themselves — age repricing and insurer book repricing — are standard and expected. The compounding of both in the same year produces a larger-than-average single-year jump.
Is this specific to AIA, or do other insurers do the same thing?
This is standard industry practice across all major Australian life insurers. TAL, Zurich, OnePath, MetLife, ClearView, Acenda, Neos and AIA all operate stepped premium structures that reprice annually with age, and all periodically conduct pricing reviews on their existing policy books. The experience Terry has had with an AIA policy is not meaningfully different from what policyholders with other insurers encounter when they reach the same policy age and age band.
What does holding life insurance inside an SMSF mean for the review process?
Holding policies inside an SMSF means annual premiums are funded from superannuation contributions, which may offer tax advantages depending on individual circumstances — a qualified accountant should be consulted on this point. The review process itself is not changed by the SMSF structure — the same comparison of cover amounts, policy definitions and market pricing applies. What is additionally considered is whether the SMSF holding structure remains optimal, or whether a different arrangement would better serve the client's circumstances.
Does a professional insurance review commit Terry to changing his policy?
No. A review is an assessment of what is available in the current market compared to what Terry currently holds. The output is information — annual premium comparisons, policy definitions, alternatives — from which an informed decision can be made. No change occurs unless Terry chooses to proceed, and no cover is cancelled until replacement cover is confirmed and in force.
How long does a professional insurance review take?
A review of this type — two policies, SMSF structure, no income protection component — typically takes three to four weeks from initial engagement to receiving comparative quotes and a formal recommendation through a Statement of Advice. This is well within the timeframe of a standard annual renewal notice.
Book a Free Consultation
If you have received an annual premium increase notice — from AIA or any other Australian insurer — a professional review is the appropriate first step before making any decision.
Christopher Hall has conducted more than 500 policy reviews for Australian families and professionals. Book a free, no-obligation consultation below.
For a broader overview of the insurance review process, visit our insurance premium review guide.
Related Articles
Educational Disclaimer
Educational Disclaimer: This content is for educational purposes only and does not constitute financial advice. Past performance is no guarantee of future results. Note: This is an anonymous case study. The client is referred to as Terry. All policy figures are accurate.
The information, opinions and other materials appearing on the Web Site are of a general nature only and shall not be construed as advice. Arrow Equities, AFSL 526688, ABN 87 645 284 680. This general information is educational only and not financial advice, recommendation, forecast or solicitation. Rose Bay Equities accepts no responsibility for the accuracy or completeness of the information, opinions or other materials provided on or accessible through the Web Site. The Web Site has not been prepared with reference to your individual financial or personal circumstances. You should not rely on any advice in this Web Site without first seeking appropriate professional, financial and legal advice. Further, where Rose Bay Equities makes third party material available or accessible through the Web Site you acknowledge that Rose Bay Equities is a distributor and not a publisher of that content and that its editorial control is limited to the selection of those materials to make available. We accept no liability for any loss or damages arising from use.
Comments