When can self employed workers claim life insurance as a tax deduction?
Life insurance for self-employed workers is an important investment. One of the common reasons why self-employed people sometimes hesitate when it comes to taking out life insurance is the added expense, which in many cases means sacrificing a portion of the family’s income. Another reason is the uncertainty of whether the insurance premiums are tax deductible or not. These considerations will greatly affect the income of the family and cause changes in their usual budget. So before you decide it is important that you consider the pros and cons of taking a life insurance. You should come into a decision as a family and understand some financial sacrifices that you can make.
Facts about tax on life insurance for self-employed workers
- Are premiums paid by self employed workers for stand-alone life insurance policies tax deductible? No, premium payments are not tax-deductible.
- Are life insurance premiums funded through superannuation tax deductible for self-employed workers? In some cases yes.
- Are total and permanent disability insurance premiums tax deductible? Not for standalone policies. They may become tax deductible if funded through superannuation
- Are Income Protection premiums tax deductible? Yes, Income Protection premiums are tax deductible.
- Are Income Protection premiums funded through superannuation tax deductible? Yes, premiums for Income Protection held within super are generally tax deductible but only for self-employed workers.