Benefits of life insurance within Super: Why insure within your SMSF?
There are four main benefits of life insurance obtained through SMSF rather than through an Individual Name, namely:
- The insurance premiums are paid for by the SMSF, rather than the Member having to pay for them out of their own financial resources. This means using your SMSF to pay for your life insurance benefits your personal cash flow and funds your Insurance Premiums.
- The insurance premiums are tax deductible to the SMSF providing an effective 15% tax saving and in turn an “effective” reduction in the annual premium. Note that Life Insurance and Total & Permanent Disability Insurance is not tax deductible in your personal name.
- You can use your after-tax contribution to pay for your insurance premium and still claim a government co-contribution, if you’re eligible for these life insurance benefits.
- Paying premiums by making pre-tax super contributions, which come from your pre-tax income, may be tax-effective.
Life insurance benefits people by giving them piece of mind and security. Enjoy these benefits of life insurance by insuring within your SMSF.