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Deductible Life Insurance Premiums
As an individual, when you pay life insurance premiums, they are not deductible on your income tax return.
However, if you are a business owner and you pay life insurance premiums on behalf your employees, your expenses may be deductible.
IS LIFE INSURANCE TAX DEDUCTIBLE FOR BUSINESS OWNERS?
The premiums you pay for life insurance policies intended to provide for your family in the event of your death are not tax-deductible, even if you pay the premiums from your business checking account.
However, if you have a life insurance policy for protecting your business assets, life insurance premiums are tax deductible.
IS LIFE INSURANCE TAX DEDUCTIBLE FOR PREMIUMS PAID ON EMPLOYEES?
Is life insurance tax deductible, if you purchase life insurance policies for your employees?
Examples of such policies for employees include both buy-sell life insurance and key person life insurance.
IS LIFE INSURANCE TAX DEDUCTIBLE FOR PREMIUMS PAID ON GROUP LIFE?
Employers who provide group term life insurance to workers may deduct life insurance premiums paid for coverage if the small business is not the beneficiary
IS KEY MAN LIFE INSURANCE TAX DEDUCTIBLE?
Some small business owners elect to purchase life insurance coverage on key employees.
In the event of the employee’s death, the business receives the life insurance policy proceeds.
Premiums paid on a qualified long-term care contract covering either yourself, your spouse or dependents are tax deductible.
The contract is a qualified contract if it meets the following conditions: It must be guaranteed renewable. Refunds may only be used to reduce premiums or increase future benefits.
It cannot provide a cash-surrender value or any other monies that can be used as collateral or assignment.
It can generally not reimburse expenses that otherwise would have been covered under Medicare.
Frequently Asked Questions
Although designed to cover you up to your retirement age, you can take out this life cover right up to age 75.
You can also include a continuation option to carry this cover forward without any fresh medical evidence.
When you receive your policy documents, they will include a Certificate to send to the Revenue to increase your tax credits, thereby granting your tax relief.
No, this type of policy can only allow 1 person and that person must be self-employed or in non-pensionable employment.
Meaning their employer does not provide life cover for them.
No, this policy is strictly for the purposes of life cover