The EOFY insurance questions everyone Googles in June

Every June, like clockwork, Australia opens a laptop, stares at a shoebox of receipts, and asks the internet the same cluster of insurance questions. Fair enough, tax time is the one month of the year when personal insurance and money actually meet in most people’s minds. So here are the questions everyone Googles, answered honestly, hedges included, because tax is one area where confident blanket answers are usually wrong answers.

One ground rule before we start: this is general information about how things commonly work. Your actual return depends on your circumstances, and the referee is current ATO guidance or a tax adviser, not a blog, ours included.

“Can I claim my income protection premiums?”

The June heavyweight, and the one with the friendliest general answer: income protection premiums are generally tax-deductible when the policy is held outside super and you pay the premiums yourself. The logic is that the policy protects assessable income, so the cost of protecting it is generally deductible. If your income protection lives inside super, with premiums paid from your balance, those premiums are generally not personally deductible.

Source: Australian Taxation Office guidance, current at July 2026.

We’ve covered this one properly, including the structural trade-offs, in our full piece on income protection and tax.

“What about my life, TPD and trauma premiums?”

Here’s where June optimism usually meets a wall. Income protection is the special case among the personal covers, precisely because it insures income. Premiums for the other cover types held in your own name generally don’t attract a personal deduction in the same way - the ATO lists life, trauma and critical care premiums among the non-deductible kinds. The treatment differs by cover type and structure, and super adds its own layer, so resist the urge to pattern-match from the income protection answer. If you’re claiming anything beyond IP premiums, that’s a conversation for your accountant, with your actual policies on the table.

“If I ever claim, is the payout taxed?”

The question nobody Googles until it matters, and the biggest catch in the whole cluster: income protection benefit payments are generally taxed as income. The deduction on the way in and the tax on the way out are two halves of one deal, insurance that replaces income gets treated like income. Practically, that means the benefit amount on your policy is a before-tax figure, and what would actually land in your account during a claim depends on your tax position that year. Budgeting the headline number as if it were take-home pay is the most common mental error in the entire product category.

How lump sums from other cover types are taxed varies with the cover, the structure, and who receives the money, particularly where super is involved, which is exactly the kind of question worth settling before a claim, not during one.

“Should I prepay or restructure before June 30?”

Every EOFY listicle hints at year-end insurance manoeuvres. Our honest take: timing tactics are accountant territory, and restructuring cover for a deduction is letting the tax tail wag the protection dog. The sequence that serves people is the reverse, first make sure the cover fits the life, then let your tax adviser optimise how it’s held. A deduction on the wrong cover is still the wrong cover.

The one EOFY habit that beats all of these

The reframe worth stealing: the genuinely valuable June move has nothing to do with deduction hunting. Tax time is the one month you’re already holding every relevant document. Super statements, policy schedules, income figures, all out of the drawer anyway. That makes June the cheapest possible moment to run a quick audit:

1. Note every policy and super account, and what cover each holds.
2. Check what each actually cost this financial year, including premiums quietly eroding super balances.
3. Confirm any IP deduction you’re entitled to is being claimed, and nothing’s being claimed that shouldn’t be.
4. Flag whether the past year changed what your cover needs to do, then deal with flags properly, not at midnight on June 29.

Twenty minutes, while the shoebox is already open. Future you, and possibly future you’s accountant, will be grateful.

Where to from here

Take the tax specifics to your accountant or current ATO guidance, that’s their lane. But if the June paperwork shuffle surfaced cover questions, what you hold, whether it fits, why the premium looks like that, bring them to a no-obligation chat with Justin. He’ll sort the protection side in plain English, and happily leave the deductions to the professionals who love them.

Related reading

• Is income protection tax deductible?
• Cover in super vs your own policy
• Reviewing your existing cover

General advice only. It does not take into account your objectives, financial situation, or needs. Consider whether it is appropriate for you and read the relevant Product Disclosure Statement (PDS) before deciding. Whether a benefit is payable depends on the specific policy terms.