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Category: Product Class

finance wise. A series of articles discussing product classes.

accounting exemption

Product Class Advice – Total and Permanent Disability (TPD) (Part 4)

James Barger-bos Leave a comment

The benefit is a lump sum paid if you become Totally and Permanently Disabled. This form of insurance is usually available as an optional benefit on a Term Life or Trauma policy. You must be disabled to such an extent that you are unlikely to ever engage in either: your own occupation OR any occupation.

The first definition is by far a more beneficial policy to be assessed under; however it is likely to be the most expensive and only available to selected occupations. The second definition is much more restrictive in that it includes ‘any occupation’ to which you may have been suited by education, training and/or experience. When considering TPD cover the definition of “own” and “any” occupation used by the product should be considered in your personal circumstances. Eligibility and cost of TPD insurance is also contingent upon your specific occupation.

If TPD insurance is owned inside an SMSF then it is only possible to have an “any occupation” definition.

Many of the features of Term Life Insurance will apply equally to TPD. The sum insured is payable in the event of TPD and is generally restricted to being no more than the death benefit. The lump sum could be used to help pay for debt reduction, income generation and the inherent costs of permanent disablement.

It is common for advisers to recommend a level of cover within superannuation which would be subject to the “any occupation” definition and a sum covered outside of superannuation where the “own occupation” definition is utilized – this is a standard requirement for professionals.

Generally term, TPD and trauma insurance premiums are not tax deductible. However, when a claim is paid the benefits are not subject to tax.

Should you wish to obtain further information about our RG146 face-to-face course, our solution for accountants once the accountant exemption expires or you wish to become an authorised representative please email [email protected] or register your interest on our website.

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Product Class Advice – Trauma (Part 3)

James Barger-bos Leave a comment

This form of insurance is available as an optional benefit on a Term Life insurance policy or as a standalone policy. A trauma payment is likely to be paid should you suffer any of the covered conditions.

This could include, but is not limited to: heart attack, stroke, cancer, paraplegia, multiple sclerosis, Parkinson’s disease, chronic liver, lung and kidney disease.

The exact conditions covered as well as the definition of each condition varies for each product. The lump sum could be used to cover debt reduction and to cover costs related to making lifestyle adjustments, necessary home and/or car modifications, medical treatment costs, work alterations and peace of mind.

Generally term, TPD and trauma insurance premiums are not tax deductible. However, when a claim is paid the benefits are not subject to tax.

Should you wish to obtain further information about our RG146 face-to-face course, or our solution for accountants once the accountant exemption expires or you wish to become an authorised representative please email [email protected] or register your interest on our website.

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Product Class Advice – Term Life (Part 2)

James Barger-bos Leave a comment

The most well-known form of risk insurance is life insurance.

Term Life provides a lump sum benefit payable to the policy owner upon your death. When the benefit becomes payable, it is normally paid to your dependents or your estate. Some policies will also pay the benefit on diagnosis of terminal illness.

This lump sum could be used to pay back debts and/or provide a lump sum that can be drawn upon to create income, and so help your family maintain their current lifestyle. In addition, it will help you keep your family’s plans on track and pass on an investment asset to your family. The most popular form is yearly renewable term, meaning that the premium is calculated each year and will normally increase as you get older. The premium is charged each year taking into account your age, gender and smoking status.

This form of insurance is flexible in that the sum insured can be altered to suit your financial circumstances without incurring any financial loss. Most forms of yearly renewable term are guaranteed renewable. This means that it can be renewed automatically irrespective of the status of your future health. However, the company can change the table of rates at any time unless the company offers a rate guarantee for a specified period from commencement.

Generally term, TPD and trauma insurance premiums are not tax deductible. However, when a claim is paid the benefits are not subject to tax.

Should you wish to obtain further information about our RG146 face-to-face course, or our solution for accountants once the accountant exemption expires or you wish to become an authorised representative please email [email protected] or register your interest on line.

If you found this article interesting, why not
  • SEND it to a friend from the sidebar
  • LEAVE A COMMENT by clicking on the icon at the top of the article
  • Send FEEDBACK directly to us at [email protected]