In this short blog, CTBS Director, Tim Wilshire shares how important it is to have Income Protection, Sickness and Accident Insurance.
AT CTBS we can’t emphasise enough how important having income protection insurance is.
It can play a very important part in a individual’s cashflow – if they were to have an accident outside the work place.
What is Income Protection Insurance?
Income protection insurance is coverage due to a loss of income and can cover situations where you cannot work due to sickness or injury or sometimes even because of redundancy (these policies are less common).
The premiums that you pay are usually based on the income you earn.
Income Protection Insurance Deductions
Income Protection Insurance deductions can be claimed in your tax return usually at label D15.
Often we see it taken either through an individual or their Superannuation fund. However, be careful as if the policy is taken out through a Superannuation Fund, then it is the fund that claims the deduction and not the individual.
Most financial planners (that specialise in life insurance) should be able to assist in making sure the policy is taken out correctly.
It is important to remember that although the premiums are deductible, any claims made on your insurance will be taxable (where the benefit is paid) are usually assessable income.
Income protection insurance shouldn’t be confused with life insurance or trauma insurance which is not tax deductible. This is because life insurance or trauma insurance is not coverage on your regular income rather on your life which the ATO sees as being capital.
Contact CTBS today on (07) 3267 2111 to find out more.
CTBS can deliver you expert knowledge and guidance across a broad spectrum of business needs. We provide services in Asset Protection, SMSF Establishment and Advice, Financing, Business Advice & Compliance, Tax Planning and Restructuring.
Whether it be a service directly offered or a referred service such as legal advice, the team at CTBS will be able to provide a solution for your business. Call CTBS today or submit an online enquiry here.