Types of life insurance and rates
The basis on which duty is calculated on a policy of life insurance is dependent on the nature or type of policy.
There are 5 types of life insurance for duty purposes:
Policies of life insurance, other than a temporary or term insurance policy, or trauma or disability insurance
This includes any policy of life insurance that does not satisfy all the conditions of temporary or term policies, or trauma or disability insurance.
Duty is calculated at:
$1 on the first $2,000, or part thereof, of the sum insured, and
20 cents for every $200, or part thereof, in excess of the first $2,000
Temporary or term insurance policies
This includes where the only benefit is a death benefit payable on the death of the insured which must occur prior to a nominated date or age and no amounts are payable if this does not happen.
Duty is calculated at 5 percent of the first year’s premium on the policy.
Group term insurance policies
This is a term insurance policy that applies in respect of the lives of a specified group of persons, being a group the membership of which may change during the term of the policy.
Duty is calculated at:
5% of the first year's premium on the policy, and
5% of the amount of the premium (if any) payable in any succeeding year in respect of each additional life covered by the insurance policy (that is, each life that was not covered during the previous year).
Life insurance riders
Life insurance riders are not considered to be policies of life insurance and have a separate rate of duty.
Duty is calculated at 5% of the first year's premium on the life insurance rider.
Trauma or disability insurance
This includes insurance under which an amount is payable in the event of the disablement of the insured by accident or sickness, or the insured being found to have a stated condition or disease.
Duty is calculated at 5% of the premium paid to effect the insurance.
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