In 2010, a study by Lifewise found that 95% of families didn’t have adequate levels of insurance. The typical Australian family will need to cope on half or less of their income as a result of underinsurance.
Understanding their finances are one of the main reasons Australians fail to protect themselves and their families. Here is how you can afford the premiums:
INSURANCE THROUGH SUPER
Did you know that you can pay your insurance premiums through your super? This may assist you with paying insurance premiums when you have a low disposable income.
OTHER WAYS TO PAY FOR COVER
You can make contributions to your super fund and gain tax benefits:
• If you’re eligible to salary sacrifice to super, you can have premiums paid from pre-tax dollars. And because your super fund may be able to claim a tax deduction for the premiums, you may not need to pay tax on the contributions.
• If you’re self-employed, making a personal contribution to super from after-tax income to cover premiums lets you claim a personal tax deduction.
YOU COULD ALSO:
• Take advantage of tax offsets of up to $540 by making a super contribution to your low-income spouse.
• Make personal contributions to super, and if eligible, qualify for a Government co-contribution of up to $500.
• A benefit payment under superannuation is paid to the fund trustee.
The trustee will only pay benefits to you or your beneficiaries if you meet a superannuation condition of release.
• Tax on death benefits is determined by who receives the benefits. You may need to ensure a binding death nomination is in place so that benefits are paid to those intended.
• Paying premiums from superannuation may erode your retirement funds so think about topping up your superannuation fund when you are able.
To take the first step to getting the right cover for you- call Fil today