Thursday, 31 March 2011

Death and Total & Permanent Disability

Personal Financial Protection
Death and Total & Permanent Disability
How you can benefit?
Many people take out insurance via a personal policy in their own name. However, if you're self-employed, have a low-income spouse or you're eligible to make salary sacrifice contributions into super, you should consider the benefits of insuring through a super fund.
By holding Death and Total and Permanent Disability (TPD) insurance through super, you may be able to reduce the effective cost of your premiums - in some cases by almost 50%. When you take into account the potential tax savings, it may also be possible to purchase a higher level of cover, when compared to insuring outside super.
How does the strategy work?
The same tax deductions and offsets that apply when investing in super also apply to insurance purchased through a super fund.
If you're self-employed, you can claim all the bulk of you super contributions as a tax deduction, (however additional taxes may apply if contribution caps are exceeded) regardless of whether the contributions are used to purchase investments or insurance.
If you're eligible to make salary sacrifice contributions, you may be able to purchase insurance through a super fund with pre-tax dollars.
If you're making super contributions on behalf of a non-working or low-income spouse, you may be able to claim a tax offset.
These tax benefits can make it significantly cost effective (on an after-tax basis) to insure through a super fund.
The benefits
  The amount saved via the deductions and offsets can be used to reduce the effective cost of your after-tax premium or increase your level of insurance cover.
  This strategy is ideal if you have a family and you're looking for financial protection.


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