Matthew Warburton of Netlife explains “there is no better time to buy Income Protection Insurance, purchase it in May & June this year and you may be entitled to a tax refund, this year*”
If you are considering applying for your income protection insurance policy then why not pay your premium now and receive your tax refund when you lodge 08-09 tax return, income protection policies are fully tax deductible at your marginal tax rate*.
Example:
John is applying for his Income Protection policy today where his net premium is $1,000 per year to protect his annual salary of $80,000
When John lodges his 08-09 tax return in July this year he will receive a $400.00 refund (40% tax refund based on earnings of $80,000pa). He has therefore paid his annual premium today of $1,000 and 3 months later receives the $400.00 tax refund. This is a very cost effective way to fund his Income Protection policy further this strategy can occur every year his Income Protection policy remains in Force.
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