The Project
At 40, Terry was struggling with a variety of health problems, after seeking treatment he was diagnosed with a mental health condition. Despite the diagnosis, Terry continued to work as a director at a company he founded, but by 43 he had to take a less challenging role. Unfortunately, Terry’s health challenges continued, and they culminated with a Parkinson’s diagnosis at 50.
Terry was referred to Fowler’s through a friend and fellow client we previously advised through several insurance claims. Running an SMSF, Terry had life insurance and TPD coverage within his fund, he was still willing and able to work, but was concerned about his ability to continue long term.
We identified the ownership of Terry’s TPD policy as an issue. Specifically, within superannuation it was subject to taxation and would prove costly upon a claim. We arranged to have the policy transferred outside the super environment. Terry’s health deteriorated over the next year prompting a claim. It was complex, but eventually Terry received a 6 figure lumpsum, along with financial certainty.
The Outcomes
- Insurance ownership altered.
- Support during a challenging claim process.
- Six figure lump sum pay out.
- $200k improvement by avoiding tax in super.
Terry was conscious of being insured, but a TPD claim from superannuation was going to expose Terry to a two-stage assessment which could prove frustrating. Any claim from super was also going to attract tax, which would leave less in Terry’s pocket. Given the existing stress in Terry’s life, when he eventually made the claim, the process was less challenging, and the taxation differences resulted in a better financial outcome.
