We often have to ask clients for their insurance information in order to evidence a claim. There sometimes seems to be confusion around what we’re asking for and why.  

We thought that we would write this help note to explain a bit more about it. 

At the heart of it always keep in mind that what we are looking for is a) confirmation of how much you paid over the financial year period b) to confirm the name of the policy holder (who gets the tax deduction) and c) to confirm the type of coverage that you have. 

 
1. What insurance policy documentation is required when providing evidence for annual returns?

As an accounting firm assisting clients with their annual returns, we require specific documentation related to insurance policies. The documentation must include the following information:

  • Owner of the Policy: The document should clearly state the name of the policy owner. This is usually the individual or entity that holds the insurance policy.
  • Date: The policy document must display the date when the policy became effective or was issued.
  • Amount Payable: It's essential that the document includes the amount payable under the policy. This can be the coverage amount, premium, or any other financial figure relevant to the policy
 
2. Are there specific formats for the insurance policy documentation?

There are no strict formatting requirements, but the documentation should be clear and legible. It should be an official document from the insurance provider or a recognised authority. In most cases, a policy declaration page, insurance certificate, or copy of the policy will suffice.

3. What if the insurance policy is under a business or corporate name?

If the insurance policy is held by a business entity, partnership, or corporation, the document should clearly state the name of the entity as the policyholder. The policy should also specify the date and amount payable as mentioned earlier.

This does come up a lot and it's worth mentioning why it is important. 

The deduction is generally only available to the person/entity that owns the policy. 

There can also be some other complications if the premiums are paid by a SMSF. If a SMSF pays for a life policy for a member, then the Fund can claim the deduction for the amount that it pays. HOWEVER if the policy is under a different name, then the fund has no reason to pay for the premiums and the connection is lost. It could then mean that the member has to repay any funds to cover that amount, or we need to look at doing a rollover for the annual amount of the policy. 

 

4. Can I provide electronic copies or scanned versions of insurance policy documents?

Yes, electronic copies or scanned versions of insurance policy documents are generally acceptable. However, make sure that the copies are clear and legible.

 

5. Can your firm assist with reviewing insurance policy documentation if needed?

Yes, we can assist in reviewing insurance policy documentation to ensure it meets the requirements for your annual return.

What we will be looking for is to ensure that the policy information provided shows the name of the policy owner, the type of insurance, who is covered and how much was paid. 

 

6. What should I do if I've lost my insurance policy documents?

If you've lost your insurance policy documents, you should contact your insurance broker or the company that you are paying to request replacement copies. They can issue new copies or provide you with the necessary information to meet the requirements for your annual return.

Remember that accurate and complete insurance policy documentation is crucial for ensuring compliance with tax regulations and a smooth annual return filing process.

 

If you have any further questions or need assistance with your annual returns, please do not hesitate to reach out to us for help.