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What is the tax treatment of my insurance policy?

You will need to check with your financial advisor about the specific tax treatment of your policies in your individual circumstances. However, in general terms the tax treatment of the different types of policies is as follows:

  • For income protection policies your premiums are likely to be a deductable expense, which you can claim against your taxable income. Should you need to make a claim, any payments you receive will generally be assessed income since they replace your regular, taxable earnings.

    Usually, the premiums you pay on life (death benefit), TPD and trauma policies are not tax deductable. However, if you make a successful claim under one of these policies you will receive a lump sum payment, which will in most cases be tax-free.

  • There may be tax advantages to structuring your policies within a Self-Managed Super Fund (SMSF), as well as cash flow benefits since the premiums for some types of insurance cover can be paid by your fund. Many insurers will allow you to package your policies so that your benefits are split, with some components (such as your income protection) held inside your SMSF and other elements held directly by you. This allows you to take full advantage of any tax benefits but still have unrestricted access to any tax-free lump sum payments you may receive.

Our experienced advisors can help you to understand the ways in which you may be able to structure your policies to make best use of your SMSF. You will still need to talk to your financial advisor to get explicit tax advice.

Contact a 1300 Life Insurance Advisor Today

1300 Life insurance have access to the full range of Life Insurance available from all Australian life insurance companies. Our advisors use sophisticated analysis to evaluate the features and benefits of each product against your own needs. Our duty of care is to always act in your best interest. We will:

  • Assess your needs
  • Make an unbiased recommendation
  • Provide you with a written statement of advice
  • Ensure your cover is properly implemented

Contact Us

If your interested in Life Insurance, please complete an enquiry form and our advisers can get in touch with you. Alternatively you can also phone 1300 543 346 during business hours.