A life insurance buy-back option is usually available to policies that are bundled with either TPD or Trauma insurance.
This is a common structure for life insurance policies as it lowers the cost of having separate insurances. It does mean however, that if you make a trauma or TPD claim, your life insurance benefit is reduced by the amount of that claim.
This is why insurers offer a buy back option.
The tax impacts you need to know with divorce and relationship breakdowns including some of the areas that may impact you and where you may need assistance for your SMSF, Trusts and Estate Planning.