Mixed policies, that is policies comprising some sickness,
disability and unemployment insurance with an investment element,
are not uncommon and may exist for genuine commercial reasons.
There is, however, a possibility that an investment could be
presented as a sickness disability and unemployment insurance
policy in order to allow payments from the policy, which are in
fact no more than a return of the premium plus a proportion of the
investment ‘profit’, to qualify for the exemption.
To prevent this, there must at all times be a genuine risk
that the insurer may make a loss on the policy, i.e. that a risk
that they would have to pay out more in benefits than they had
received in premium income. If such a risk does not exist, payments
from the policy will not qualify for the exemption.
| Further reference and feedback | IPTM1013 |
