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.
- 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.
- 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.