What is the benefit of paying Life Insurance into Superannuation?
A. In the case where a life insurance payment is received in a Super fund due to the death of a policy owner, it is up to the trustee of the Super fund to decide who will receive the benefits. The actual Life insurance fee is deductible if the super contribution is deductible. It will of course depend on the tax payers tax rate as to the total benefit received. The life insurance payment forms part of the tax payers Reasonable Benefits Limit and as such may be taxed at the highest tax rate in some cases. With the abolition of RBLs there may be nil tax levied on life benefits but this has not been finalised .
