Life insurance protects your family by paying a lump sum if you die.
Most people think that life insurance is only for the main income earner, but the person who takes care of the family is also a large contributor to the home and can be insured.
Life insurance can be purchased inside or outside of superannuation.
Many super funds provide life insurance. Premiums can be paid from contributions made to your fund by your employer, by you personally or simply deducted from your account balance in the fund.
Tax Treatment Outside Super
- Premiums are generally not tax deductible.
- The benefit payment is tax free.
- Broad range of potential beneficiaries.
Tax Treatment Inside Super
- Premiums are tax deductible for the super fund.
- The benefit payment may be taxed, depending on who receives it.
- Limited range of potential beneficiaries.
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