Which Type of Insurance is Tax Deductible ?
Different insurance terms like TPD plans, Income Insurance plans and Trauma Insurance plans (also known as Critical Insurance) fall under Life Insurance. The tax benefits and other benefits you get out of the plan type you choose may depend on several factors.
In Australia, tax are determined on insurance policy type and on some taken out through superannuation but under the law, life insurance premiums are generally tax deductible. The usual deductible premiums are those of:
- Workers compensation insurance
- Indemnity insurance
- Premiums paid by self employed professionals for disability insurance
The general guideline that governs insurance taxes is simple. Most Income Protection Insurance plans are tax deductible whether taken as standalone or add on cover except for the following:
- Trauma insurance plans
- Life insurance plans and permanent disability plans taken out as standalone or separately
Superannuation Life Insurance
Superannuation life insurance has lower premiums aside from the tax benefits that come with it. Most Australians can avail of it since super funds are offered to self-employed and to company employees. Superannuation life insurance guarantees:
- Higher take home pay
- Financial assistance for the family in case of the insured’s death
Tax Deductible Life Insurance Options
Life insurance is not limited to term life insurance plans. Other types that fall under life insurance plans include TPD coverage, income protection and trauma insurance coverage.
It is best to speak with a trusted financial advisor or qualified insurance agents to better understand how tax deductibles on life insurances work. Give us a call for detailed information so we can better assist you.