Generation XSpend less to be secureIf insurance is low on your shopping list, don’t worry you’re not the only one. Many Gen X’s give personal insurance a low priority because we don’t think we need it. However, strangely, we insure our cars or our homes without a second thought! Well the good news is that personal insurance can be very tax effective. In this strategy we outline how you can make sure you can take care of your loved ones, and make sure that if something does happen to you, their future is secure. What types of insurance are available through super? Life and Total and Permanent Disability (TPD) insurance pays a lump sum and goes a long way to looking after those you’d leave behind if you died or were seriously injured. It works by paying out a lump sum in the event of your death or serious injury to help care for your loved ones or pay medical bills. Income Protection insurance is designed to provide you with a monthly income protection benefit of up to 75% of your earnings in the event you are unable to work due to sickness or injury. Tax-effective insurance By having your insurance through your super fund, you’re likely to find your premiums cost less as tax concessions apply. For example: If you're eligible to make salary sacrifice contributions you may be able to purchase insurance through a super fund with pre-tax dollars. If you earn less than $61,9201 pa and you make personal after-tax super contributions, you may be eligible to receive a Government co-contribution that can help you cover the cost of insurance. If you make super contributions on behalf of a low income spouse, you may be able to claim a tax offset of up to $540 pa that can be put towards insurance premiums for you or your spouse. If you earn less than 10% of your income1 from eligible employment (eg you’re self-employed or not employed), you can generally claim your super contributions as a tax deduction – regardless of whether they are used in the fund to purchase investments or insurance. These tax concessions can make it cheaper to insure through a super fund than outside super, enabling you to save money or take out the right amount of insurance for your needs. See FDFL's Debt Management and Risk Insurance services.
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