Profit-Share Plan

Profit-Share Plan

Profit-Share Plan

One of the principles of mutuality is that profits are shared with Members.

When you and our other Members pay your premiums, the money is used to pay claims, to cover our insurer’s expenses and to provide claim reserves for the future. This generates profits which are shared by PPS Mutual Members by way of a Profit-Share Plan.

For most life insurance companies these profits would be allocated to shareholders.

The Profit-Share Plan is issued to the life insured under a core insurance Plan (unless in Super where it is issued to the Super Trustee).

There are two components to the Profit-Share Plan:

1.  The Profit-Share Account

The amount of Profit-Share that is allocated is based on:

  • The amount of premiums paid on each insurance under your Plan (allocations may vary between different benefits); and
  • The current balance of your total Profit-Share Account

We plan to declare the bonuses each September for the year ending on the previous 30 June, at which time an annual statement will be sent to you showing the bonus declarations and the balance of your Profit-Share Account.

Interim bonus rates will be set for the new financial year for any payments made during the year.

The balance of all Profit-Share Accounts will be held in the insurer’s PPS Mutual Benefit Fund and will be invested by the Insurer in accordance with the prevailing investment strategy.

Members can access the full amount of their Profit-Share Account from the earliest of:

  • Their 65th birthday
  • 20 years after their Profit-Share Plan commenced
  • Death or Terminal Illness
  • Full TPD or Trauma payment (and no other Plans held that would otherwise continue)
  • Natural expiry of all Plans on the life insured (if we have restricted the term of these insurances)

If you have multiple Profit-Share Plans for the same Life Insured, the 20 years starts from the commencement of the first Plan (provided it has been held continuously).

In the event that all the core insurance Plans on the same Life Insured lapse or are cancelled, then the Profit-Share Plan Owner is paid out the maximum amount that is available to withdraw.

2. Accidental Death Benefit

Each Plan has a $10,000 accidental death benefit (which does not index each year).

This amount will be paid out if death is caused by an accident.

This is available in both Superannuation and non-superannuation environments.

Profit is retained in a Profit-Share pool within the PPS Mutual Benefit Fund and assigned to your individual Profit-Share Account each year. This Profit-Share pool is invested by the fund and your share of investment returns are added to your Profit-Share Account.

The balances of the Profit-Share Account are not guaranteed and can be affected by, amongst other things, positive and negative investment performance and claims experience.