At a glance:
- An investment in insurance products can have tax savings
A year’s end can be a very stressful and overwhelming time. Some people are just finishing up their tax paperwork from the previous year, and now it is time to start all over again. What can you do to simplify this process? What can a financial advisor do for you come June 30th each year to help you make the most of your money?
When it comes to tax savings, it’s always a good idea to get an early start.
A tax deduction can be claimed for income protection policy premiums. Paying your premiums in advance prior to June 30th may allow you to claim the full deduction in this year’s return, something worth considering.
For example, if you prepay your premiums for the next 12 months before June 30th next year, you can bring forward a tax deduction from next year to the current year – potentially lowering your taxable income this year.
Reviewing your insurance portfolio at the end of the financial year is always a good idea. There are many policyholders who haven’t reviewed their coverage for several years, so the monthly income protection benefit may not match their higher income level. Wouldn’t it make sense to make the adjustment now? By prepaying annually, you could save money on premiums, and you will be able to deduct the cost of the premiums for the current year.
For policies taken out outside superannuation, the ATO allows you to claim the premiums for income protection. Unfortunately, income protection premiums included in your superannuation are not tax-deductible
Aspect Underwriting can provide you with an excellent ‘outside super’ income protection option.
Mike Wallis
Mike has over 25 years experience, having spent his first seven years working as a Broker at Jardine Lloyd Thomson in Melbourne and in 2002 was transferred to JLT’s Accident and Health Department in London. For four years (2002 – 2005) Mike was a specialist A&H Lloyd’s Broker and during this time developed excellent relationships with the Lloyd’s A&H underwriting fraternity. In 2006 he returned to Australia in a senior broking position with overall responsibility for Placement Strategy, including the implementation of underwriting facilities and the various authorities granted by Lloyd’s. Mike was the underwriter at two specialist Underwriting Agencies prior to founding Aspect Underwriting in 2016.
