Can I claim tax relief on my life insurance costs?
Tax relief on ordinary life insurance was abolished in 1991. However many people are unaware that you can still claim tax relief on your life insurance costs through a product known as Pension Term Assurance. This could save you up to 41 per cent on your net lifecover contributions.
While there are some qualifying criteria, for most people they are not particularly onerous, especially if your goal is to provide financial security for your loved ones. If you have a personal pension, a PRSA, or indeed no pension at all, then you can avail of personal pension term assurance and claim full tax relief as part of your age related limits. If you are already a member of an Occupational Pension Scheme then you are restricted to a maximum benefit of four times your annual salary, inclusive of any existing death benefits your pension scheme may provide and you must obtain the approval of your pension scheme trustee to effect a pension term policy.
The other main restriction of this type of cover is that it cannot be assigned or used as security for a loan or mortgage – the benefit must be paid directly to your estate. As always, independent, professional advice is recommended before affecting such a policy. Such advice is available from Melvin Financial Services at 096 70244 or by e-mailing [email protected]