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Types of insurance

Definitions for general insurance, life insurance, the rate of duty for life insurance, and when to apportion between different insurance types.

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General insurance

General insurance is any kind of insurance that relates to:

  • property in NSW
  • a risk, contingency or event concerning an act or omission that, in the normal course of events, may occur within, or partly within, NSW, or
  • both.

General insurance includes car, home and contents insurance. It doesn't include life insurance, a life insurance rider, or insurance that’s exempt from duty.

There are three types of general insurance.

TypeDescription Rate of duty
A Any general insurance other than type B or type C. 9 per cent of the premium
B Includes:
  • motor vehicle insurance
  • aviation insurance
  • disability income insurance
  • occupational indemnity insurance
  • hospital and ancillary health benefits insurance
 5 per cent of the premium
C Includes:
  • crop insurance
  • livestock insurance
 2.5 per cent of the premium, for policies taken out on or before 31 December 2017. Exempt for all policies taken out on or after 1 January 2018.

Life insurance

Life insurance means insurance or assurance of:

  • a life or lives
  • any event or contingency relating to the life of a person (or group of people), whose principal residence is in NSW at the time the insurance policy is issued.

Life insurance includes a life insurance rider, which is insurance that:

  • is attached to a life insurance policy
  • adds specified events and contingencies to those insured under the policy
  • is subject to the terms and conditions of the policy.

A life insurance rider isn't a life insurance policy and it has a separate rate of duty, which is five per cent of the first year’s premium on the life insurance rider.

Rate of duty for life insurance

Life insurance policies

A life insurance policy – other than temporary or term insurance, or trauma or disability insurance – is any policy that doesn’t satisfy all the conditions of temporary or term insurance, or trauma or disability insurance.

Duty

  • $1 on the first $2,000, or part thereof, of the sum insured.
  • 20 cents for every $200, or part thereof, over the first $2,000.
Temporary or term insurance policies

Policies where the only benefit is a death benefit that is payable on the death of the insured, which must occur before a nominated date or age. Nothing is paid if this doesn’t happen.

Duty

  • Calculated at five per cent of the first year's premium.
Group term insurance policy

A term insurance policy that insures the lives of a group of people – and the members of the group can change during the term of the policy.

Duty

  • Five per cent of the first year's premium.
  • Five per cent of the premium payable in any following year, for each additional life covered.
Trauma or disability insurance

Policies that cover the insured should they become disabled by accident or sickness, or get a stated condition or disease.

Duty

  • The duty charged on a trauma policy, a total permanent disability (TPD) policy, or a disability income policy is five per cent of the premium.

Exempt insurance

Learn about the types of insurance that are exempt from duty.

Apportionment between different types of insurance

Where a policy contains different types of insurance, an apportionment of the premium is required when calculating the duty payable.

A policy of insurance may contain life insurance and different types of general insurance, as well as exempt insurance.

In these cases, the premiums relating to each insurance type must be separated and have the correct rate of duty applied.