Details of your insurance policy, the premiums you've paid, and any benefits you've received, are essential for your tax return. Therefore, to make life easier for yourself when preparing your tax return, keep all documents relating to your life insurance policies handy, including annual notices and payout information.

As an Acenda customer, you can always securely locate correspondence relating to your insurance by logging in to the Customer Portal.

The short answer is that it depends – some premiums are tax deductible, others aren’t.

• Generally not deductible: Premiums for Life Cover, Total and Permanent Disability (TPD), and Critical Illness (Trauma) cover.
• Possibly deductible: If your insurance is held inside your super and you make personal contributions (e.g. via credit card or BPAY), you may be able to claim a deduction. You’ll need to submit a Notice of Intent form to Acenda and receive an acknowledgement before lodging your tax return.
• Usually deductible: Premiums for Income Protection (IP) or Business Expenses insurance, as they relate to income replacement.

If your self-managed super fund (SMSF) holds your insurance, you won’t be able to claim premiums paid by your fund as a personal tax deduction. However, the SMSF trustee may be able to claim some (or all) of the insurance premiums it paid during the financial year when lodging the SMSF Annual Return.

The tax you pay on insurance payouts depends on the type of cover you have and if it’s held inside super.

• Generally tax-free: Payouts from Life Cover, TPD, or Critical Illness cover held outside super.
• May be taxable: If held inside super, tax treatment depends on factors like who receives the benefit and how it’s paid.
• Usually taxable: Income Protection and Business Expenses payouts, as they replace income.

Because tax rules around insurance benefits can be complex, it’s best to speak with a tax professional if you’re unsure.