Income protection insurance, also often called income insurance, pays up to 75% of your income when you suffer from an accident or illness. It helps protect your livelihood, allowing you to pay for bills and living expenses while you focus on recovery.

This type of cover is especially important for families where there is one main breadwinner. It is also vital for single people who want to ensure their financial independence no matter what life throws their way. If you cannot afford to take extended leave from work due to injury or illness, then this type of cover is for you.

In Australia, Kamagra jelly income insurance is generally tax deductible. As long as your premiums relate to the earning of assessable income, then the Australian Taxation Office (ATO) will generally allow a tax deduction.

How much can I claim back from my income protection insurance policy?
It depends on the cost of your premiums, but generally speaking if you have a stand alone policy you should be able to claim the entire premium when doing your tax.

However if your policy is bundled, then the amount you claim will be different.

Speak to your tax adviser for further information regarding your tax return.

Bundled income protection insurance in Australia
If your income insurance is bundled with other policies, such as life, TPD or trauma insurance, then only the income protection portion is generally tax deductible. This is because any payment which goes towards a lump sum death, disability or trauma payment is generally not tax deductible.

Your insurer should advise you each year on how much of your premium is allocated to income insurance and is therefore tax deductible. This usually comes in the form of a schedule outlining your policy number and the premium amount allocated to each portion of your bundled policy.

Income protection insurance and tax
If you want to claim back your premium in the same financial year, make sure you pay for your premiums before June 30th. Keep in mind that applying for cover and processing your policy may take a few days, so leave yourself enough time before the cut-off date. If you pay your premium in July, you will have to wait another year to claim your premiums.

In the event that you do become ill or injured and make claim, generally the benefits you receive must be declared as income when doing your tax return.

If you would like to compare these types of policies, speak to your financial adviser. For specific taxation advice, please speak to a qualified tax accountant. You can also contact the Australian Taxation Office to discuss claiming a tax deduction for your insurance premiums.

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Category: Finance
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