Tax Time – Income Protection

Another area you may not be aware of where you may be able to get a tax deduction is with Income Protection.

Under tax law, Income Protection insurance premiums that you pay for and own in your own name are tax deductible.  However, finding the right policy and applying for income protection is not a process I would recommend without consulting a licensed Financial Adviser.  And not something I would suggest trying to undertake within one week.

Under the Life Insurance Contracts Act in Australia, an insurer has the right to underwrite policies before they are accepted.  This can take some time, the benefit to you is that once you are accepted, irrespective of any changes I your health over time, the insurer cannot take that policy away from you (whilst your premiums are paid).

If you already have a policy, you could contact your adviser or insurer today to see about paying for your policy for the next 12 months, or part thereof, upfront and claim the deduction before 30 June 2016.

If you don’t, whilst an Income Protection policy may be something you should seriously consider, it probably is the immediate tax benefit you should be concentrating on.

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