How many of us here in Australia love paying taxes? I am yet to meet one person.

How many Australians are aware of the different tax consequences within Life Insurance policies? Unfortunately not too many.

Not knowing the advantages and disadvantages of the different types of policy ownership and the importance of structuring your beneficiaries correctly can lead not only to unnecessary taxes for the beneficiaries, but also needless exposure of those insurance proceeds.

As consumers we are bombarded with information on social media, the internet, television and radio advertising, or even on the backs of buses as we sit in traffic. We can’t escape it and sometimes it can feel like information overload, so when we receive the inevitable phone call from the telemarketer informing us that we can obtain $1,000,000 life insurance simply by answering six easy questions then it just seems like the perfect, simple solution doesn’t it (assuming that we needed the insurance in the first place)?

What about just ticking the insurance option box on your Industry Superannuation member form – simple right?

Buyer beware

Before purchasing your life insurance policy you need to know what ownership choices you have, what options you have in regards to beneficiary nominations, and what the advantages and disadvantages of those options are particularly from taxation and asset exposure points of view.

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Other types of personal insurance

Trauma/Critical Illness insurance provides a tax-free lump sum payment if you contract a specified critical condition – these include heart attack, stroke, cancer, MS, paralysis and blindness.

TPD insurance provides a lump sum in the event that you become totally and permanently disabled (as defined in the insurance policy). A TPD payment is normally paid after being totally incapacitated for at least six months.

Income protection insurance provides a monthly benefit for a specified period in the event that you are unable to work due to a sickness or accident.

The Allocator

Providing asset protection & tax-free incomes for Australian families since 2010

The Allocator software, Australia’s first & only on-line estate planning software, was developed in 2010 by Craig Ball, Director of Succession & Estate Planners Pty Ltd & Peter Sa, Director of JPL Accountants.

The idea for this user-friendly estate planning software came about after Craig had just completed a national estate planning roadshow &, on his return to Brisbane, was inundated with requests from Financial Planners & Risk Specialists right around the country to develop ‘something’ that could assist them with the estate planning complexities that currently exist within the realms of superannuation & life insurance.