Income tax: is the premium payable on a trauma insurance policy, sold with a life assurance policy rider, assessable income of a life assurance company?

Yes. The premium payable on the trauma insurance policy sold by a life assurance company constitutes assessable income of the life company. As a trauma insurance policy is an accident and disability policy (see Taxation Determination TD 95/39), the decision in National Mutual Life Association of Australasia Ltd. v. FC of T (1959) 102 CLR 29 applies to treat the premiums as assessable income of the company.

The premium payable by the insured for the trauma insurance cover can, in all circumstances, be separately calculated from the premium payable for the life assurance cover.

If it were the case that the premium for the trauma insurance and the premium for the life assurance could not be separately calculated, then the whole of the premium is assessable income of the life company: see National Mutual case supra per Windeyer J at 50. Note: the Addendum to this Determination that issued on 18 August 1999 applies in relation to the 1997-98 or a later income year.