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Money Hack: Prepaying your income protection


Score a tax deduction and discount by prepaying your income protection before 1 July.

Tax time is looming and if you're anything like most Aussies, you're racking your brain trying to work out what you bought in the last year that's tax deductible and where the hell you put the receipt.

While going out and buying something just because it's tax deductible doesn't make sense, if you are looking to protect one of your most important assets (ie your ability to earn an income) for less, you might want to keep reading.

The hack

If you're in the market for income protection and want to find yourself more than just a cheeky deduction, you might want to consider prepaying your income protection premiums before 1 July this year.

One of the benefits of getting income protection outside of your super is that your premiums are... wait for it... tax deductible. With the average income protection policy costing in the range of $400 to $1,000 a year, come tax time you've got yourself quite the tasty deduction for something that is borderline essential. And the savings don't stop there.

Double down on income protection savings

Just like a handful of health insurers, some life insurers will reward you with an annual payment discount for paying your income protection premiums upfront.

For example, NobleOak will give you 4.5% off your premiums if you choose to pay them upfront. You can get one month free if you prepay your premiums with Virgin Money Life Insurance, but you must pay for them over the phone.

finder money hacks is a bi-weekly round-up of the latest tips and tricks to improve your finances. Check back every Wednesday and Saturday for new hacks.

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Picture: Shutterstock / frinkiac

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