Tax time and life insurance
Tax rules aren’t always simple when it comes to life insurance. Here’s where you'll find information to help keep you on top of your tax time to-do list.
Tax rules aren’t always simple when it comes to life insurance. Here’s where you'll find information to help keep you on top of your tax time to-do list.
While we recommend getting tax advice from a registered tax agent, here are the main types of life insurance cover where a tax deduction may be available, or tax may be payable.
For further details specific to your cover type, read more below.
If you hold Life Cover, you generally can’t claim a tax deduction for premiums paid. But if your Life Cover is for business purposes, then your tax situation may be different, so please seek advice from your financial adviser or a registered tax agent.
If you hold Life Cover inside super and have made personal contributions to pay the premiums by direct debit, credit card, or BPAY, you can claim a tax deduction for those contributions. Before completing your tax return, look out for a Tax Questionnaire from us, which includes a 'Notice of Intent' form that you'll need to complete and send back. Please note you won't be able to claim a tax deduction if you incorrectly complete the 'Notice of Intent' form, if you don't return the completed form to us in time, or if you haven't made any personal contributions and have paid your premiums from your super balance.
Insurance payouts on a Life Cover claim are generally not taxable. But if you’ve received a Life Cover claim payout for business purposes, then your tax situation may be different, so please seek advice from your financial adviser or a registered tax agent.
Insurance payouts on a Life Cover claim for insurance held inside super may be taxable depending on the way it was paid, the tax components that make up the payout and the claimant’s relationship with the deceased. Payouts on life insurance policies held inside super can be a complex area to navigate and we recommend seeking professional tax advice.
If you hold TPD insurance, you generally can’t claim a tax deduction for the premiums paid. But if you hold TPD cover for business purposes your tax situation may be different, so please seek advice from your financial adviser or a registered tax agent.
If you hold your TPD cover inside super and have made personal contributions to pay the premiums by direct debit, credit card, or BPAY, you can claim a tax deduction for those contributions. Before completing your tax return, look out for a Tax Questionnaire from us, which includes a 'Notice of Intent' form that you'll need to complete and send back. Please note you won't be able to claim a tax deduction if you incorrectly complete the 'Notice of Intent' form, if you don't return the completed form to us in time, or if you haven't made any personal contributions and have paid your premiums from your super balance.
Insurance payouts on a TPD claim are generally not taxable. But if you’ve received a TPD claim payout for business purposes, then your tax situation may be different, so please seek advice from your financial adviser or a registered tax agent.
Insurance payouts on a TPD claim for insurance held inside super may be taxable. The amount of tax, if any, will depend on your age, the way the payout was received, and other circumstances. Payouts on TPD insurance policies held inside super can be a complex area to navigate and we recommend seeking professional tax advice.
No, premiums paid for Critical Illness cover aren’t tax deductible.
No, you aren’t expected to pay tax on Critical Illness payouts.
If you hold Income Protection insurance, you can generally claim some or all of your premiums as a tax deduction. To help you complete your tax return, we’ll provide you with an Annual Letter that summarises the total premiums paid over the past financial year and the portion that is tax deductible.
If you hold Income Protection insurance inside super and have made personal contributions to pay the premiums by direct debit, credit card, or BPAY, you can claim a tax deduction for those contributions. Before completing your tax return, look out for a Tax Questionnaire from us, which includes a 'Notice of Intent' form that you'll need to complete and send back. Please note you won't be able to claim a tax deduction if you incorrectly complete the 'Notice of Intent' form, if you don't return the completed form to us in time, or if you haven't made any personal contributions and have paid your premiums from your super balance.
Some or all insurance payouts on an Income Protection claim will need to be declared as income on your tax return. To help you with this, we’ll send you an Annual Benefit Payment Letter that outlines the benefits paid over the past financial year and what portion isn’t considered taxable income.
Insurance payouts on an Income Protection claim for insurance held inside super will need to be declared as income on your tax return. However, some insurance payouts received may have already had tax withheld. We’ll send you a PAYG Payment Summary that outlines the insurance benefit payments you’ve received and the amount of tax withheld.
If you or your business hold Business Expenses insurance, generally some or all premiums paid may be claimed as a tax deduction. To help prepare tax returns, we’ll send an Annual Tax Letter summarising the total premiums paid and the portion that is tax deductible.
If you or your business received insurance payouts on a Business Expenses claim, those payments will need to be declared as income on the relevant tax return. To help you with this, we’ll send an Annual Benefit Payment Letter that outlines the benefits paid over the past financial year and what portion isn’t considered taxable income.
You may need to declare some or all these payments as income in your tax return. However, some payments received may have already had tax withheld. We’ll send you a PAYG Payment Summary outlining the payments you’ve received and the amount of tax withheld, if applicable.
If your SMSF holds your insurance policy, you’re not eligible to claim premiums paid by your fund as a personal tax deduction. However, the SMSF trustee may be able to claim some or all of the insurance premiums it’s paid during the financial year when lodging the SMSF Annual Return.
For more information, refer to our SMSF annual statement page >
We provide EOFY statements to help prepare your tax return. The statement you receive depends on your policy, cover type, and whether you hold insurance inside super.
Available by 14 July 2023
If you have an annuity policy or have claimed on insurance inside super, we’ll send you a PAYG Payment Summary that outlines the payments you’ve received and the amount of tax we’ve withheld in the past financial year.
Available by 24 August 2023
If you hold your insurance inside super and have made personal contributions to pay the premiums by direct debit, credit card, or BPAY, we'll send you a Tax Questionnaire (including a 'Notice of Intent' form) outlining the contributions you may be eligible to claim a tax deduction on.
Available by 18 August 2023
If you hold Income Protection or Business Expenses insurance outside super, we’ll send you an Annual Letter that summarises the total premiums paid over the past financial year and the portion that is tax deductible. Please make sure to only disclose the deductible portion of your premium in your tax return.
Available by 4 August 2023
If you've claimed on your Income Protection or Business Expenses insurance, we'll send you an Annual Benefit Payment Letter outlining the insurance payments you've received over the past financial year and the portion that is not taxable income. Please make sure to disclose the annual benefit as income in your tax return.
EOFY statements will be available online at my.mlcinsurance.com.au for:
Your statement will be mailed to the address we have on file if you:
Allow up to seven business days for statements posted within Australia, and 25+ business days for international deliveries.
Please refer to the EOFY statements section for detailed information on how and when you’ll receive your EOFY statement/s.
You generally can’t claim a tax deduction for insurance premiums on Life, TPD and Critical Illness (Trauma) covers. However, if you have insurance cover for business purposes, then your tax situation may differ. We recommend seeking advice from your financial adviser or a registered tax agent.
If your insurance policy is held inside super and you’ve made personal super contributions to pay for the insurance premiums (eg by direct debit, credit card or BPAY), you may be able to claim a tax deduction for those contributions.
Look out for a Tax Questionnaire that includes a 'Notice of Intent' form stating how much you’ve paid in personal contributions. Before claiming a tax deduction on those contributions, please:
When it comes to life insurance, tax rules aren’t always easy to understand. Check out Insurance and tax to find out more about which premiums may be tax deductible.
If you have a policy with online access, both you and your financial adviser can view your statement online (excluding PAYG Payment Summaries) in the Customer and Adviser Portals.
Access your statement in the Customer Portal by logging in at my.mlcinsurance.com.au using your Customer Number.
If you’re currently on or have been on an Income Protection claim, you can request an email copy of your PAYG Payment Summary or Annual Benefit Payment Letter through this online form after the 'Available by' date above.
Advisers can also request a copy of their client’s PAYG Payment Summary or Annual Benefit Payment Letter through this online form.
MLC Life Insurance is not licensed to provide tax advice as we’re a life insurance product provider. Taxation rules can be complex and change often, so it’s always a good idea to seek advice from a financial adviser or registered tax agent before lodging your tax return. They can advise on the deductions you’re eligible to claim and help make sure you’re meeting your tax obligations.