Is Trauma Insurance Tax Deductible?by Deepa
Is Trauma Insurance Tax Deductible?
The premium that an individual pays for trauma insurance cover is not tax deductible. Generally, tax deductions are not allowed in a situation where an insurance provider pays the claimant a lump sum in the event of illness, injury or death.
According to the Australian Taxation Office (ATO), tax claims for deductions cannot be made on full or partial premiums of policies that compensate â€œsuch things as physical injuryâ€.
The concept of trauma insurance cover is to offer a lump sum payout based on medical conditions that significantly impact an individualâ€™s life. The benefit received by the claimant is dependant on type of illness or, seriousness of injury, thus making the payment ineligible for tax deductions.
In comparison, an income protection policy does allow an individual to claim tax deductions. The monthly benefit from income protection cover is based on the nature of disability whether total or partial. That is because this payout is designed to cover the loss of income short term or even long-term if you opt for the appropriate cover.
To get free advice about Trauma Insurance and other insurance covers based on your individual circumstances please join the many Australians contacting a Life and Insurance advisor on 1300 259 365. Alternatively, you can also contact Life and Insurance via theÂ trauma insurance quote or income protection quote page.