Ownership of income protection in your personal name

If you hold your income protection policy through your own name, the costs of the premium will be funded from your own personal cash flow.

Advantages

  • You can generally claim a tax deduction on the premiums, thereby reducing your ongoing personal tax liability;
  • You can generally tailor the insurance more closely to your needs than a Group income protection policy;
  • You may get your claim quicker as the claim will be paid out to you directly instead of going through the superfund.

Disadvantages

  • The premiums are paid out of your after tax income, which reduces your cash flow; and
  • The cost of the insurance held through a personal name is generally higher than for a Group income protection policy held within a super fund.

When income protection is recommended to be held in your personal name

  • You have sufficient cash flow to cover the premiums;
  • The premiums payable for income protection are generally tax deductible.
The Dover Group