Income Protection Insurance: Being Familiar With The Tax Deductions

With today’s increasingly uncertain global economy, holding down a secure job has become an increasingly very important concern, primarily for breadwinners. For those who have just started to consider about income protection insurance, the product market can seem pretty challenging, as there are a great number of factors to worry about. This guide will offer basic information on income protection cover and its associated tax deductions.

One of the more frequently asked queries by income protection insurance policy holders is whether the premiums they pay are tax deductible or not. The Australian Taxation Office takes tax deductions for any insurance premium. However, one needs to prove that it relates to the generation of assessable salary. One specific type of insurance that is fully tax deductible is income protection cover.

Tax regulators are of the perspective that the premiums had outcomes that are favorable to the income. In this way, tax deduction is definitely granted. The part of one’s premium may not allow for tax deduction, however, in the event that one’s income protection cover policy includes heavy coverage for disablement, death, or injury. Thus, to be certain, one should find out from his insurance provider about how much of the premium can be claimed as tax deductible. Otherwise, one may not be able to claim any tax deduction in in any manner.

In addition to the statistics one gets from his insurer, he must also get in touch with the Australian Taxation Office. Data from a tax accountant can also be valuable for such issues. There will be some other tax concerns, too, in connection with one’s income protection insurance. Any responsible individual will strive to understand and address them as well. In one’s tax return, one must state any proceed or claim that has been obtained from the income protection cover. Failing to do so can bring about long term taxation problems.


Familiarize yourself more about income protection insurance here and secure your family and your future today.