Tax Benefits When Buying Insurance

Most insurance consultants are legally only able to give out general advice to their clients. When considering the taxable benefits in regards to the area of insurance, we recommend speaking to your tax specialist. Lifebroker insurance consultants however, can give you a general overview regarding tax benefits when you buy insurance.

Keeping in mind everybody’s individual situations are different; there are usually 3 specific situations that relate to tax benefits.

Income Protection Insurance

Unlike term life insurance, trauma insurance and TPD insurance, income protection insurance is actually tax deductible.

Due to the fact your income relates directly to your assessable income, the Australian Tax Office allows concessions in regards to this insurance.

Key Man Insurance

Another form of tax deductions through insurance comes in the form of key man insurance. This type of insurance is taken out in case a ‘key person’ to do with the business passes away. Depending on the situation, key man insurance is generally found to be eligible to be tax deductible.

Insurance through your Superannuation

If you own a self managed super fund, you are able to purchase a life insurance policy through it.

Some super funds will not allow you any tax concessions; however with others you are able to claim tax deductions.  

If you need any advice or wish to discuss these matters in detail it is best to consult a tax professional.