{"id":25743,"date":"2014-04-01T15:52:55","date_gmt":"2014-04-01T05:52:55","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=25743"},"modified":"2014-04-01T15:52:55","modified_gmt":"2014-04-01T05:52:55","slug":"tax-deductible-life-insurance","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2014\/04\/01\/tax-deductible-life-insurance\/","title":{"rendered":"Tax-Deductible Life Insurance?"},"content":{"rendered":"<div id=\"polls-116\" class=\"wp-polls\">\n\t\t<div class=\"pollHeader\"><strong>Which solution would most effectively address Australia's underinsurance dilemma?<\/strong><\/div><div id=\"polls-116-ans\" class=\"wp-polls-ans\"><ul class=\"wp-polls-ul\">\n\t\t<li>Tax-deductible life insurance premiums <small>(73%)<\/small><div class=\"pollbar\" style=\"width: 73%\" title=\"Tax-deductible life insurance premiums (73% | 109 Votes)\"><\/div><\/li>\n\t\t<li>Tax levy for those who don't have a minimum level of cover <small>(17%)<\/small><div class=\"pollbar\" style=\"width: 17%\" title=\"Tax levy for those who don't have a minimum level of cover (17% | 25 Votes)\"><\/div><\/li>\n\t\t<li>Pay all life insurance premiums from superannuation accounts <small>(6%)<\/small><div class=\"pollbar\" style=\"width: 6%\" title=\"Pay all life insurance premiums from superannuation accounts (6% | 9 Votes)\"><\/div><\/li>\n\t\t<li>Not sure <small>(4%)<\/small><div class=\"pollbar\" style=\"width: 4%\" title=\"Not sure (4% | 6 Votes)\"><\/div><\/li>\n\t\t<\/ul><div style=\"text-align: center\"><\/div><\/div>\n\t\t<input type=\"hidden\" id=\"poll_116_nonce\" name=\"wp-polls-nonce\" value=\"a7e4151a88\" \/>\n<\/div>\n\n<p>Recent research released by the Financial Services Council in conjunction with MetLife has added to a growing chorus of calls to make the cost of life insurance tax deductible.<\/p>\n<p>Our latest poll is asking you to cast your vote as to how you would most prefer to see tax-deductible life insurance implemented.<\/p>\n<p><!--more-->The general argument for making the cost of life insurance tax deductible is that the associated loss in federal income tax revenue will be more than compensated by the long-term reduction in the level of pensions, social security payments and other government benefits made to those who cannot afford a basic lifestyle without that assistance.\u00a0 If the cost of life insurance is made tax-deductible, it is argued, more Australians would hold appropriate lump sum and income protection insurance cover, meaning fewer would have to rely or rely as heavily, on the Government to make ends meet.<\/p>\n<p>The FSC\/MetLife research (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2014\/04\/01\/underinsurance-apathy-the-real-enemy\/\">Underinsurance &#8211; Apathy the Real Enemy<\/a>) found the top messages that resonated with non-life insurance policy holders included the future prospect of life insurance tax incentives and disincentives (the carrot and the stick).\u00a0 The &#8216;carrot&#8217; argument supports the notion that consumers will be motivated to take out life insurance because of the opportunity it would provide them to reduce their level of income tax.<\/p>\n<h6>&#8230; the &#8216;stick&#8217; approach argues the most effective way to ensure more Australians take out minimum levels of life cover is to penalise those who don&#8217;t<\/h6>\n<p>Meanwhile, the &#8216;stick&#8217; approach argues the most effective way to ensure more Australians take out minimum levels of life cover is to penalise those who don&#8217;t.\u00a0 This is the same argument that currently applies to the private health insurance sector, where those individuals or couples earning above certain income levels are required to pay an additional Medicare levy if they do not hold private health insurance cover.<\/p>\n<p>The research found there is also a third option that resonates with non life insurance policy holders, namely the opportunity to deduct the cost of life insurance from consumers&#8217; superannuation accounts, thus removing the need for the client to find additional funding, either cash or credit, to pay for their premiums.<\/p>\n<p>Each of these three options have their supporters and their detractors.\u00a0 For example, some sectors would strongly advocate against even the remotest possibility of using superannuation account balances to fund all life insurance costs, while others would argue the Government is not in a position to offer any tax relief, given the current large deficit in the National Accounts.\u00a0 So, we are gazing into only one possible future where life insurance premiums (outside superannuation) will become tax-deductible.\u00a0 But, if that future arrives, which would be your preferred model?\u00a0 Why?\u00a0 Let us know what you think&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recent research released by the Financial Services Council in conjunction with MetLife has added to a growing chorus of calls to make the cost of life insurance tax deductible. Our latest poll is asking you to cast your vote as to how you would most prefer to see tax-deductible life insurance implemented.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,3,49],"tags":[],"class_list":["post-25743","post","type-post","status-publish","format-standard","category-compliance-regulation","category-general","category-polls"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/25743","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=25743"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/25743\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=25743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=25743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=25743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}