If you plan to continue claiming a tax deduction on your super fund's permanent disability insurance, then you better review the wording of your policy now because a change in the tax rules means many insurance policy holders no longer qualify.
From July 1, the ATO has fully implemented changes to the accepted definition of Total and Permanent Disablement (TPD), and insurance contracts that don't meet the new standard can't claim a full deduction. So, if you're in the market for a new TPD insurance policy, you'll want to choose one that's specifically worded so that they'll be fully deductible.
There have been many different definitions of Total and Permanent Disablement over the years, so it’s impossible to generalise about the countless types of TPD insurance contracts used by self-managed super fund investors. However, let's take a look at three common definitions of TPD.