Normalising.....how Far Do You Go?

I am about to start helping someone make a data base and since it is a "start from scratch" I am going to avoid errors that are in my own data base. In both cases our occupations are insurance.

One obviously important part of the data is the recording/description of policy benefits. In my own data base I have all of this in one table which results in null fields in about every record

There are basically four types of policy and they all have some common fields or data which are

Policy Type.... Huge repeater in the record set
Insurance Co...Huge repeater in the record set
Policy Number
Application Date
Commence Date
Benefit Amount
Mode of Payment......Huge repeater in the record set
Payment Amount
Policy Status......Huge repeater in the record set

There would be no null fields in any of the above except for a perid of time following application. Commencement Date can be anywhere from a couple of weeks to several months after the application date but all the other fields have data from about day 1.

There are then fields that only apply to each policy type and also they repeat a great amount throughout the record set.

For example, Income Replacement insurance will have

Waiting Period....98% of the policies will be 2, 4 or 13 weeks

Benefit Period Sickness....virtually all will be Age 65 or Life or 2 years
Benefit Period Accident...Same range as above but period could be different. Could have Sickness for 2 years and Accident to Age 65

Approximately 2/3rds of the records would have null fields for the above.

Life Insurance, Total and Permanent Disability and Trauma Cover also have a couple of fields that only apply to each type of cover.

There are four fields which for the vast majority of records three of the fields will be null.

Issued Standard Y or N. Obviously a huge repeater.

If not a standard isssue (minority of policies) then these fields get entries

Premium Loading. Nearly every record will be null and those with an entry will only have a few different entries eg. 150%, 200% etc

Policy Conditions Altered Y or N

Altered Policy Condtions....Paragraph 27 changed to whatever etc

How far down would you break it. If it is all in one table there are 26 fields. (just counted mine:D)

There are only 5 fields where they apply to every policy type and where the data is not hugely repeated through the record set.

Policy Number
Application Date
Commence Date
Benefit Amount
Payment Amount