Financial Planning Reimbursement

The financial planning reimbursement benefit is generally a built-in feature that provides a reimbursement for the cost of financial planning advice following the payment of a lump sum benefit.

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When is the benefit available?

The benefit is available in the following circumstances:

If you have a life insurance policy and pass away or are diagnosed with a terminal illness
If you have a trauma insurance policy and are diagnosed with a critical illness that is specified in the policy.
If you become tally and permanently disabled and have a TPD policy.

Why do insurers include this feature?

The benefit is available as you or your family may want the assistance of a financial adviser to help deal with the large sum of money that may be received as a result of a claim on the policy. A financial adviser will generally be able to help set up a plan for the lump sum – whether that is putting it in a trust account, investing, paying off debt or using it in some other way.

How does the financial planning reimbursement benefit work?

In order to receive the benefit you or your beneficiaries will be required to:

number-1Receive and pay for the advice within a certain period of time following the claim – usually 6 or 12 months.
number-2Ensure the financial adviser is a an authorised representative who is authorised provide financial advice.
number-3 Provide proof of the cost and payment of the advice your insurer, generally in the form of a tax invoice.
number-4Ensure that the advice received is related the lump sum benefit you were paid.

How much can be reimbursed?

This will differ between life insurance companies but may range between $2,000 and $5,000. When you are discussing with your consultant, it is important to speak to them about what amount is offered with this benefit.

How often is this benefit payable?

Generally the benefit is paid once however this may depend on your insurer, with some insurers may allow the benefit be paid more than once.

Does the financial planning reimbursement benefit affect my lump sum benefit?

No, generally, the financial planning benefit is paid on top of your regular benefit and payment of this benefit does not impact or reduce your regular benefit.

Published: June 16, 2015

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