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Income protection - can I claim a tax deduction for my premiums?
The Australian Taxation Office
allows tax deductions for insurance premiums where it
can be proven that those premiums relate to the earning
of assessable income.
One type of insurance premium which is allowable as a
tax deduction is that paid for Income Protection
Insurance (also known as Sickness and Accident). The Tax
Office’s view is that the premium paid results in the
benefit of income, and as such allows a deduction for
it. However, if there is a component in the premium that
goes towards a lump-sum cover for death, injury or
disablement, then that part of the premium is not an
allowable deduction. If you have a combined Income
Protection and Death/Disability policy, your
insurance company should advise you how much of your
insurance premium you can claim as a tax deduction. If
you are unable to obtain the split, then you should not
claim a deduction at all.
For further information on claiming a tax deduction for
your insurance premiums, contact the Australian Tax
Office or your tax accountant. And remember, if you do
make a claim under your Income Protection Insurance, you
must declare the income in your tax return. Disclaimer
The information provided is general in nature and
does not take into account your particular insurance
needs, financial situation or investment objectives.
We recommend that you speak to an xlife risk adviser or life insurance broker before you make any
decision regarding risk insurance. |
