By: Elena Grace Flores
In some countries, people are buying life insurance to lower down their taxes. It’s like – it’s better to spend the money on insurances rather than give it to the government perception. However, not all insurances can be tax free. In many countries, they are also taxable. So, do not waste your resources buying insurances you don’t really need. The money is better off for public services, education and healthcare for the less privilege.
Tax Free Insurances
Depending on your country’s tax deductible law, there’s a certain bracket or ceiling for the maximum amount of life insurance premiums that can be deducted from your taxable income. There are also cases that when paying more than one premiums the allowable non taxable amount for life insurance will not be applicable anymore.
Tax Deduction Eligibility
It is best to check your eligibility for tax-free insurance in your country because there are policies involved in availing these benefits depending on the laws of the land where you are. For example, if the amount of coverage is less than ten times the premium, in some countries – one can’t avail anymore of the tax-deductible offering.
There are also things like internal rate of return and disease or disability relief that can be verified locally just in case they can help in lowering down your government tax liability. Although let’s not forget that if we pay higher taxes, the more we can contribute in the progress of our country despite the existence of corruption.