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Draft Taxation Determination

TD 94/D49

Income tax: is a trauma insurance policy issued by a life company an accident or disability policy for the purposes of Division 8 of the Income Tax Assessment Act 1936 (the Act)?

  • Please note that the PDF version is the authorised version of this draft ruling.
    This document has been finalised by TD 95/39.

FOI status:

draft only - for comment

Preamble

Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO.

1. Yes, a trauma insurance policy is an accident or disability policy for the purposes of Division 8 of the Act. It is not a life assurance policy.

2. A trauma insurance policy pays an amount to the insured if the insured suffers a condition specified in the particular policy such as a heart attack, cancer, stroke, etc.

3. Those conditions may constitute disabilities, and therefore the premiums are properly characterised as accident or disability premiums which are to be included in the assessable income of the AD/RLA class for the purposes of Division 8 of the Act (paragraph 116 CE(3)(c)).

Commissioner of Taxation
19 May 1994

References

ATO references:
NO
BO Insurance Industry Cell

ISSN 1038 - 8982

Related Rulings/Determinations:

TD 94/D50
TD 94/D51
TD 94/D52
TD 94/D53

Subject References:
life assurance company
trauma insurance policy
accident & disability insurance policy

Legislative References:
ITAA 116 CE(3)(c)
ITAA Division 8


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