Luke on 2CC – Is insurance tax deductible?

Can you get a tax deduction on your personal insurance?

Financial Adviser, Luke Smith, Financial Planner Canberra
Financial Planner Luke Smith joined 2CC Talking Canberra 1206AM in
The Money Show which aired on Friday 19 March 2021. This week’s topic: Is insurance tax deductible, when it comes to your personal insurances? Personal insurance includes income protection cover, trauma cover, and life cover. 

This week Luke and Leon wrap up the insurance series. When it comes to personal insurance some of it is tax deductible and some of it isn’t. Certainly tax deductibility isn’t the main reason for taking out insurance, but most people are happy to learn about what their tax deductions are. 

Key highlights include:

  • As a general rule, people like tax deductions
  • There are two key questions to determine if personal insurance is tax deductible or not:
    • What is the purpose of the insurance (does it replace lost income)? 
    • Who owns the policy?
  • Life cover and tax deductibility
  • Trauma cover and tax deductibility, and the opportunity for business owners 
  • Income protection cover and tax deductibility
  • Also consider where the money is going, should a life insurance payment occur
    • Non-dependent children (adult children) received payments that will be taxed
    • Minor dependents and your spouse receive tax free payments
  • Always start with your why? Why are you doing it?
  • Then think about where the money is going and how it will be taxed?
  • Remember, good insurance is about the quality of the policy and the things you are covered for – it’s not just about getting a tax deduction
  • Luke offers some key strategy tips, as part of thinking about your own insurance requirements
  • Everyone has different goals and financial planning advice can help you achieve them more effectively, especially when you link different strategies.
Listen to the Podcast right now

Also available on Apple Podcasts and Spotify ‘The Strategy Stacker – Luke Talks Money’

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Do you need advice around your insurance cover?

Insurance might be tax deductible
The quality of your insurance policy and the outcomes it provides are really important. Seek advice if you need help.

Luke as a Financial Planner can help you set up a financial planning strategy to help you achieve your personal financial goals. Insurance can be complicated but the good news is you can make an appointment to speak with Luke about your specific cover requirements and options.

Make an appointment to confidentially discuss your own insurance, investment, super or retirement goals. Call Envision Financial Services on 6260 4749. You can also use our contact us form to make an appointment for a confidential discussion about your situation.

Luke will return to talk about financial planning on 2CC next Friday. You can also catch up with The Strategy Stacker – Luke Talks Money podcast.  We look forward to your company again.

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