I am self employed and am considering taking out some insurance in case I can't work due to illness, broken leg etc. If I take this insurance out is it 100% deductible at the end of the tax year?

Hi @Dawn P. - yes, income protection should be 100% tax deductible. Please check with your accountant that this applies to your situation.

Hi Dawn

I've spoken to the Financial Advisers in our office and they have advised that only Income Protection is tax deductible to you personally. If you take out business insurance such as keyman insurance, the tax deductibility will depend on if the cover is for revenue or capital purposes

I'm sure they would be happy to discuss further with you.

Thanks

Abby

Hi Dawn,

There are different tax deductions to consider when holding insurances in your own name or under your superannuation as the tax benefits can then be passed back to you.

If the benefit comes as an income stream. Generally, income protection insurance is 100% tax deductible when taken out as a standalone policy.
Everything else such as Life insurance, Trauma and TPD are only tax deductible when taken within the superannuation policy and trauma cover is no longer available inside a superannuation environment.
Basically, your fund will claim a tax-deduction when it makes a payment to your life insurance premiums. It will then pass on this benefit to the member by removing any tax that is payable from your super contributions.
It is best to speak with an Accountant or a Financial Adviser to understand what applies to your personal situation and how best to structure your insurances.

Feel free to contact me should you have any further questions.

Thanks,

Ronald Pratap
Principal Financial Adviser
RP Wealth Management
Level 2, 351 Oran Park Drive, Oran Park 2570
T: 02 9188 1547 M: 0434 502 079
E: ronald.pratap@rpwealthmanagement.com.au
W: www.rpwealthmanagement.com.au
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