The various types of personal insurances you can own within superannuation and the potential deductibility of insurance premiums.
More information at
http://www.superguy.com.au/is-life-insurance-tax-deductible/
NO1 WorldWide Love marriage specialist baba ji Amil Baba Kala ilam powerful v...
Is life insurance tax deductible in super?
1. Is Life Insurance Tax
Deductible in Super?
By Chris Strano
Super Guy
http://www.superguy.com.au/is-life-insurance-tax-deductible/
2. Defining Life Insurances
3 MAIN TYPES OF INSURANCE IN SUPER
• Death Cover
• Total and Permanent Disability (TPD)
• Income Protection
COLLECTIVELY REFERRED TO AS LIFE INSURANCES
3. Tax Deductibility Status
• Ability to claim a tax deduction for the premiums
payable
• Tax deduction is a deduction to the superannuation
fund (often passed through to member account)
• Not a tax deduction for the member, personally
4. What is an insurance
premium?
• A premium is an amount payable, usually on an
annual or monthly basis, to the insurance provider in
exchange for the promise of receiving insurance
benefits should you suffer an insurable event, as
defined by the insurance policy in place.
5. Death Insurance
• Death cover generally provides the
owner/beneficiary of a death insurance policy with a
lump sum upon the death of the insured. Most
commonly, this will be a lump sum paid to a
husband or wife in the event their spouse was to
pass away.
6. Death Insurance
• In most circumstance, the premiums payable for
Death Cover will be tax deductible within your
superannuation account.
7. TPD Insurance
• Total and Permanent Disability (TPD) Insurance
generally provides a lump sum to the insured when
they suffer a TPD event, as defined by the
insurance policy.
8. TPD Insurance
• The deductibility of TPD insurance needs a little
more explaining. However, I do not want to confuse
the matter too much, as each individuals’
circumstances will differ.
• Basically, the portion of the premium relating to the
‘core’ benefits of a TPD policy will generally be tax
deductible.
9. TPD Insurance
• The portion of the premium relating to non-core or
ancillary benefits (such as ‘extras’) will generally not
be tax deductible.
• It needs to be determined what portion of the
benefits of a TPD policy a trustee would be
obligated to provide a disability superannuation
benefit to a member and the scope of the insured
event.
• Refer to Taxation Ruling TR 2012/6 for further
information.
10. Income Protection
• Income Protection insurance provides a
replacement income to the insured after a specific
time period for a predetermined time frame, or until
the insured is able to return to work. Partial benefits
may continue to be received if the insured returns to
work part-time. It is unusual for an Income
Protection policy to provide a replacement income
of greater than 80% of the insured’s pre-
illness/disability income, as they encourage and
intend the insured to return to work in some
capacity.
11. Income Protection
• Premiums are generally 100% tax deductible.
• Core benefits are generally accessible, provided
cover is in accordance with your pre-disability
income
• However accessibility to ancillary benefits may not
be possible without meeting another condition of
release.
• Maybe more beneficial to own in your personal
name due to a higher effective tax benefit