Didn't know you could get tax back on your life insurance? Well I'm here to let you in on a little known life insurance hack which can save you up to 40% on the cost of your life insurance.
There are 7 types of Life Insurance available in Ireland:
Whole of Life Cover: a policy taken out to cover you for the rest of your life; a guaranteed tax free lump sum paid to your estate with the option to get cashback with certain types.
Life Term Cover: introduced as a more affordable alternative to Whole of Life cover; you take out the policy for a specific term and if you die within the term a tax free lump sum is paid to your estate. The cover and premium stay the same throughout the term.
Decreasing Term Cover: similar to life term but the cover decreases throughout the term. Used in line with a mortgage or the reducing need for cover i.e. family becoming less dependent on your earnings as they get older.
Monthly Income: pays a tax monthly income instead of a lump sum in the event of death; cover ceases at the end of the term.
Death In Service: employment related benefit that pays a multiple of salary in the event of death. Cover ceases when employment ceases.
Section 72 Life Insurance: Life term cover designed to pay inheritance tax. Taken out on the life of the person leaving the inheritance.
The 7th Type is the only life insurance that you can claim tax relief on:
Pension Term Insurance: the name is deceiving as it implies you need to have a pension to take it out but you don't. It is only available to self employed individuals or PAYE workers that do not have a pension scheme at work. It is life term cover that qualifies for tax relief at your marginal rate.
It cannot be used for assignment purposes so would not be suitable for mortgage protection.
It is the most tax efficient way to arrange life insurance. Pension Term Insurance is available from all the main providers and costs the same as regular life insurance. Contact us now if you think you're eligible to avail of our exclusive discount!
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