$8,474 Out-of-Pocket Saving After Insurance Restructure: A Case Study
- Mar 11
- 15 min read
Updated: Apr 4
Written by Christopher Hall, AdvDipFP | Authorised Representative, AFSL 526688 | March 2026 | Updated April 2026
Case Study Summary
A NSW-based carpenter with eight years of unreviewed ClearView life insurance, TPD and income protection policies was paying $9,314 per year entirely from personal income. Following a complimentary review by Christopher Hall at Arrow Equities, the existing policies were cancelled and replaced with new ClearView policies at new-business rates. Life cover increased from $1,000,000 to $1,400,000. TPD cover was maintained at $1,400,000. Income protection increased from $6,000 to $6,900 per month, with the waiting period reduced from 180 days to 30 days. The total annual premium fell from $9,314 to $5,574 — a saving of $3,740 per year, approximately 40% of the original premium cost. By restructuring life and TPD into superannuation, the amount paid from personal income fell to $840 per year — an out-of-pocket saving of $8,474 annually, a 91% reduction in personal cash outlay. No advice fees were charged. Client details have been anonymised. "Dave" is a pseudonym used with the client's consent. Identifying details including occupation, income and family situation are included with permission to illustrate the real-world impact of this outcome.
Client Snapshot
Dave is a carpenter based in New South Wales, earning approximately $120,000 per year. He is married with two young children and had recently refinanced his home to fund renovations — a decision that placed renewed pressure on the family's monthly cash flow. Like many Australian tradespeople — carpenters, plumbers, builders, electricians, concreters and cabinet makers — Dave had taken out life insurance, TPD and income protection when he first purchased his home eight years prior. Tradespeople in physically demanding occupations frequently hold insurance arranged at the time of a major financial commitment, then carry those policies without review for years or even decades. The policies were set up correctly at the time. Dave had simply never had reason to look at them again.
Dave came to Arrow Equities through a trusted referral seeking the expertise of a specialised personal life insurance adviser. The review was complimentary — no advice fees were charged at any point.
Why Tradespeople Value TPD and Income Protection Differently
There is a pattern Christopher Hall observes consistently when tradespeople are referred for a review that does not appear with the same frequency in any other occupational group. Carpenters, plumbers, builders, electricians and concreters tend to arrive already knowing what they want — and why they want it.
"Tradies almost always ask specifically for income protection and own occupation TPD," Christopher explains. "That's not something most clients do. Most people don't know those distinctions exist until we explain them. Tradespeople often already know. The reason is straightforward — they've worked on a site with someone who needed it."
The proximity to real claims is what drives this awareness. A tradesperson who has watched a colleague sustain a serious injury understands, in practical terms, what the financial consequences look like — not just in the weeks following the accident, but for years and decades. The ability to work physically, to be on the tools, to run a business at full capacity — that is their livelihood in a way that is materially different from an office role. Losing it is not an inconvenience. It can mean losing the family home.
Why own occupation TPD matters for a carpenter specifically
Dave's ClearView TPD policy — both before and after the restructure — used an own occupation definition. This is the more valuable definition, and for a carpenter, the more appropriate one.
Under own occupation TPD, a claim is assessed against whether Dave can perform the specific duties of his occupation as a carpenter. Under any occupation — the definition used in most super fund default cover — a claim is assessed against whether Dave can work in any role suited to his education, training or experience. For a tradie, those two definitions can produce very different outcomes on the same injury.
The distinction mirrors the situation of a dentist with severe arthritis in their hands. Under own occupation, that dentist cannot perform dental procedures and a claim is paid — regardless of whether they could theoretically manage a dental practice from an administrative role. Under any occupation, the insurer may argue the dentist remains capable of practice management, dental consulting or related work, and decline the claim. The earning capacity in those alternative roles — typically a fraction of what a practising dentist earns — is irrelevant to how any occupation TPD is assessed. A carpenter who can no longer frame, fix and operate on a building site but could theoretically supervise or quote from an office faces an identical risk under any occupation cover.
The occupation evolution risk — when work changes, cover can change too
One nuance tradespeople often understand better than most is that their occupation is not static. A carpenter who begins work primarily above ten metres — on commercial sites, scaffolding or elevated structures — is operating in a materially different risk category from residential carpentry. That change, if not communicated to an adviser, can affect the cover available and the terms on which it is held.
What is less understood is that occupation changes can also work in the policyholder's favour. A shift in the nature of work — away from higher-risk site conditions — can unlock a premium discount that, if identified and structured correctly with an adviser, can remain for the life of the policy. This is one of the reasons keeping an adviser informed of changes in occupation and work type is not merely a compliance matter — it can be a meaningful financial advantage.
Dave's cover was reviewed against his current occupation and circumstances. His own occupation TPD was confirmed as appropriate and maintained in the restructure.
For a full explanation of how own occupation and any occupation TPD definitions differ and which occupations benefit most from each, that article addresses the distinction in detail.
The Problem: Eight Years of Loyalty Tax
At the time of the review, Dave was paying $9,314 per year in ClearView insurance premiums — entirely from his personal income, with no superannuation contribution involved. That is roughly $776 per month leaving the family's bank account for a set of policies that had never been independently assessed since the day they were issued.
Dave had no reason to suspect he was overpaying. His policies were legitimate, his cover was real, and no one had ever told him there was a better arrangement available. What had happened over eight years was a gradual accumulation of what the industry calls the loyalty tax — the compounding effect of annual premium increases applied to existing policyholders, while new customers at the same insurer receive new-business pricing. This is sometimes referred to as premium creep, and it is one of the most consistent findings across Arrow Equities' 500+ policy reviews.
Across that review base, Christopher Hall consistently identifies premium reductions of between 30% and 60% when replacing long-standing policies with equivalent new-to-market cover — before any structural improvements are applied. In Dave's case, the total premium reduction was approximately 40%, with a 91% reduction in personal out-of-pocket cost once superannuation funding was factored in. Both figures reflect the combination of loyalty tax accumulation and a policy ownership structure that had never been assessed.
The problem is structural, not personal. Insurers including ClearView are not penalising individual policyholders — they reprice risk annually on existing books while competing aggressively on price for new customers. The result, after eight years without review, is a significant gap between what Dave was paying and what new-business pricing could deliver for the same insurer.
With a recently refinanced mortgage and renovation costs already stretching the household budget, $9,314 per year paid entirely out of pocket was a number worth examining.
What the Review Found
Two findings emerged from the assessment — one on cost, one on structure. Together, they produced an outcome that would not have been possible by addressing either in isolation.
The first finding was on premium cost. Dave's three ClearView policies — $1,000,000 life cover, $1,400,000 TPD, and $6,000 per month income protection — were being renewed at in-force rates that had compounded over eight years. Arrow Equities went to market and assessed alternative providers including Acenda, which offered competitive new-business pricing. However, a detailed review of Dave's medical history indicated that for his specific personal circumstances, ClearView's policy terms and underwriting position represented the better overall outcome. The restructure therefore replaced Dave's existing ClearView policies with new ClearView policies issued at current new-business rates — capturing the pricing benefit of new-to-market competition without the underwriting risk of moving to a new carrier.
This is an important distinction. A direct-to-consumer price comparison tool would have identified Acenda as the cheaper option and stopped there. A professional review assessed the full picture — including what medical history means for underwriting at a new insurer — and arrived at a different conclusion. For more on how medical history affects insurance applications, see Arrow Equities' guide on medical disclosure in insurance applications.
The second finding was structural, and ultimately more significant. Dave had been funding all three policies entirely from his personal income — a common arrangement among tradespeople and salaried employees alike, but not necessarily the most cost-efficient one. Insurance inside superannuation costs Australians over $6 billion per year according to APRA data cited by Super Consumers Australia in their 2024 submission to APRA's Insurance Data Transformation project — yet the majority of clients presenting for review at Arrow Equities have never had their ownership structure assessed. Dave had no awareness that life insurance and TPD premiums can, in many cases, be funded through superannuation contributions, dramatically reducing out-of-pocket cost without reducing cover. For more on how this structure works, see Arrow Equities' guide on insurance through super vs personal payment.
What Changed
Dave's three existing ClearView policies were cancelled. New ClearView policies were issued at new-business rates across all three cover types.
Life insurance increased from $1,000,000 to $1,400,000 — reflecting Dave's updated financial position following the home refinance and renovation commitment. The new policy is funded through superannuation contributions.
TPD cover was maintained at $1,400,000. The new policy is also funded through superannuation. Moving both life and TPD into super unlocked a tax efficiency that had not been available under the previous structure: contributions used to fund these premiums are taxed at the concessional rate of 15% inside the fund, rather than at Dave's personal marginal tax rate. Because all three policies were previously held personally, this benefit had never been accessible to him.
Income protection was restructured as a new personally held policy — the appropriate structure for IP, which may, depending on individual circumstances, allow premiums to be claimed as a personal tax deduction. Whether this applies in a given situation should be confirmed with a qualified financial adviser or accountant. The monthly benefit increased from $6,000 to $6,900 per month. The waiting period was significantly reduced from 180 days to 30 days — meaning Dave would now receive benefit payments within 30 days of a qualifying claim, compared to six months under the previous policy. The benefit period changed from cover to age 65 to a five-year benefit period. These are structural changes to the IP policy that reflect different trade-offs and individual circumstances, and are not a direct like-for-like comparison. Policyholders considering an IP restructure should assess how a benefit period change affects their specific financial position with a qualified adviser before proceeding.
The Outcome
Metric | Before Review | After Restructure |
Insurer | ClearView | ClearView (new policies) |
Total annual premium | $9,314 | $5,574 |
Paid from personal income | $9,314 | $840 |
Funded via superannuation | $0 | $4,734 |
Super tax concession (15%) | Not available | Unlocked |
Annual saving — total premium | — | $3,740 |
Annual saving — out-of-pocket | — | $8,474 |
Life insurance cover | $1,000,000 | $1,400,000 ↑ |
TPD / disablement cover | $1,400,000 | $1,400,000 (maintained) |
Income protection — monthly benefit | $6,000/month | $6,900/month ↑ |
Income protection — waiting period | 180 days | 30 days ↑ |
Income protection — benefit period | To age 65 | 5 years |
Advice fees charged | — | $0 |
Dave's total annual ClearView premium fell from $9,314 to $5,574 — a saving of $3,740 per year. More significantly for the family's day-to-day finances, the amount coming directly out of personal income fell from $9,314 to $840 per year — an out-of-pocket saving of $8,474 annually. Life cover increased by $400,000. Income protection monthly benefit increased by $900 per month and the waiting period improved from 180 days to 30 days, with the benefit period moving from to-age-65 to five years.
For a carpenter earning $120,000 per year with a recently refinanced mortgage and two children, the cash flow improvement is material — and the same outcome is directly relevant to plumbers, builders, electricians and other tradespeople who arranged insurance at the time of a property purchase and have not reviewed it since.
Individual outcomes will vary. The premium savings and structural benefits available through a policy review depend on a range of personal factors including age, health history, existing policy terms, superannuation balance and financial circumstances. Medical underwriting for new policies means that not all policyholders will qualify for equivalent terms, and individual health background can materially affect the pricing and availability of replacement cover. The income protection changes in this case study involve different policy terms and are not a direct like-for-like comparison — policyholders should assess benefit period and waiting period changes carefully with a qualified adviser.
Key Lessons From This Case
1. Eight years without review produced a 40% premium gap on the same insurer.Dave's policies were held with ClearView throughout — the saving came from replacing in-force rates with new-business rates at the same insurer, not from switching carriers. This is the loyalty tax in its clearest form: the same insurer, the same cover, a dramatically lower price for new customers. The absence of a review is not evidence that no gap exists. See Arrow Equities' overview of when a premium increase signals it's time for a professional review.
2. The cheaper insurer is not always the right insurer.Acenda offered more competitive pricing than ClearView at the point of comparison. A detailed assessment of Dave's medical history indicated that ClearView's underwriting position was the better outcome for his specific circumstances. A professional review identified this distinction. A price comparison tool would not have. This is one of the most consistent findings from Christopher Hall's 500+ policy reviews — the insurer with the lowest quoted premium is not always the insurer that will accept a claim without complication.
3. Superannuation can fund life and TPD premiums, dramatically reducing out-of-pocket cost.The majority of clients presenting for review at Arrow Equities — including tradespeople, salaried employees and self-employed individuals — have never been told this option exists. Moving eligible premiums into super does not reduce cover. It changes how the premiums are funded. For many families carrying mortgage debt and cost of living pressure, this structural change alone is the most impactful outcome of a review. See the full guide on insurance payment structure.
4. Income protection waiting periods are a frequently overlooked variable.Dave's original policy had a 180-day waiting period. Under that structure, a qualifying injury or illness would have left the family without benefit payments for six months. The new policy carries a 30-day waiting period. For a carpenter — or any tradesperson in a physically demanding occupation where an injury is a genuine workplace risk — the practical difference between a 30-day and 180-day wait is significant. Waiting periods and benefit periods should both be reviewed as part of any IP assessment, not just the monthly benefit amount. See Arrow Equities' comparison of income protection vs life insurance.
Frequently Asked Questions
Can life insurance premiums be paid through superannuation?
In many cases, yes. Life insurance and TPD (total and permanent disablement) premiums can be funded through superannuation for eligible policyholders. This means premiums are paid from super contributions rather than personal income, which can dramatically reduce out-of-pocket cost. Income protection premiums are generally not funded through super, as the tax treatment is more favourable when held personally. Whether this structure is appropriate depends on an individual's superannuation balance, contribution limits and financial circumstances. See Arrow Equities' detailed guide on insurance payment structure for a full explanation.
What is the 15% tax concession for insurance premiums inside superannuation?
When life insurance and TPD premiums are funded through superannuation contributions, those contributions are taxed at the concessional rate of 15% inside the fund, rather than at the individual's marginal tax rate. This creates a tax efficiency that is not available when the same premiums are paid from personal after-tax income. The practical effect is that the real cost of the cover is lower inside super than outside it — a benefit that many policyholders are unaware of because their policies were never structured to access it.
Does moving insurance into superannuation reduce cover or change the policy terms?
Not necessarily. In many restructuring scenarios, equivalent or greater cover amounts can be maintained through new policies issued within or linked to a superannuation fund. The key distinction is in how the premiums are funded, not in the nature or amount of the cover itself. Any restructure involving new policy issuance requires fresh underwriting, and individual health circumstances will affect the outcome. A professional review is the appropriate way to assess whether a restructure is suitable. See Arrow Equities' guide on medical disclosure in insurance applications for context on how underwriting works.
Why does staying with the same insurer sometimes produce a better outcome than switching?
Switching to a new insurer requires fresh underwriting — meaning the new insurer will assess the policyholder's current health and medical history from scratch. Where a policyholder's health circumstances have changed since the original policy was issued, a new insurer may apply exclusions, loadings or decline cover entirely for conditions that are already covered under the existing policy. In some cases, issuing new policies with the current insurer at new-business rates achieves the pricing benefit without the underwriting risk of a carrier change. This is a distinction that only becomes apparent through a professional review that examines the full medical and policy picture — not just the premium comparison.
What is the difference between a 30-day and 180-day waiting period on income protection?
The waiting period on an income protection policy is the length of time a policyholder must be unable to work before benefit payments begin. A 30-day waiting period means payments commence after one month of incapacity. A 180-day waiting period means six months must pass before any benefit is received. For tradespeople and others in physically demanding occupations where an injury or illness is a genuine risk, the waiting period is one of the most practically significant variables in an income protection policy — and one of the most frequently overlooked when policies are first arranged.
Is income protection better held inside or outside superannuation?
The appropriate structure for income protection depends on individual circumstances including tax position, superannuation balance, contribution caps and cash flow priorities. There are meaningful differences in how income protection is taxed and paid depending on whether it is held inside or outside super, and the right answer varies from person to person. This is one of the key questions a professional insurance review is designed to address. A qualified financial adviser can assess which structure is appropriate for a specific situation — this is not a decision that should be made without personalised advice.
How do I know if my insurance structure is right for my situation?
The most reliable way to assess this is through a professional review that examines not just the policy terms and premiums, but the broader financial structure — including superannuation eligibility, contribution limits, tax position and cash flow priorities. Many policyholders who present for review at Arrow Equities have never had this assessment conducted. Policies are often set up correctly at inception for the circumstances at that time, but financial situations change — and so do insurance markets. Arrow Equities completes 10 to 20 reviews of this nature every month. The professional review process is complimentary and carries no financial obligation.
What is own occupation TPD and why does it matter for tradespeople?
Own occupation TPD pays a lump sum if you can no longer perform the specific duties of your occupation — even if you could theoretically work in a different capacity. For tradespeople, this distinction is critical. A carpenter who sustains a serious back injury and can no longer work on the tools may still be capable of a supervisory or administrative role. Under any occupation TPD — the definition used in most super fund default cover — the insurer could argue the claim should be declined on that basis. Under own occupation TPD, the claim is assessed against the carpenter's ability to perform their specific trade, not any alternative role. The difference between the two definitions can be the difference between a paid claim and a disputed one on the same injury. Dave's ClearView TPD policy used an own occupation definition — before and after the restructure.
What happens if a tradesperson's work changes — does it affect their TPD cover?
It can. A carpenter whose work shifts from residential buildings to above-ground commercial construction, elevated structures or sites with additional occupational hazards is operating in a different risk category from their original policy terms. If that change is not communicated to an adviser, it can affect the cover available and the conditions under which a claim would be assessed. Less understood is the reverse — a shift away from higher-risk work can unlock a premium discount that, if identified and structured correctly, can remain for the life of the policy. Keeping an adviser informed of changes in occupation type and work environment is not merely administrative — it can be a meaningful financial advantage. This is one of the key reasons tradespeople benefit from an ongoing adviser relationship rather than a set-and-forget policy.
Book a Free Insurance Consultation
Arrow Equities offers complimentary insurance reviews for Australian families and tradespeople. If your policies have not been independently assessed in the past three to five years, Christopher Hall's experience across 500+ policy reviews suggests a meaningful probability of finding either a premium saving, a structural improvement, or both.
The review process is explained in full at the Arrow Equities 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.
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.
