IPTM7515 | Calculation of gains: full surrender, maturity, death or whole assignment: related policies

A new policy is related to an old policy if it is issued:

• in substitution for the old policy, or

• on the maturity of the old policy following the exercise of an option in the old policy.

Two policies are ‘related policies’ if one is related, directly or indirectly, under this definition to the other. So, if policy A is related to policy B and policy B is related to policy to C, then policies A, B and C are all related policies.

Although the definition of ‘related policy’ is derived from ICTA88/SCH15/PARA17, it applies to all life insurance and capital redemption policies, not just qualifying policies.

Where an old policy is replaced by a new related policy, there will be a surrender or maturity chargeable event.