Make your insurance affordable this tax year and beyond

Important information:

This information is published by MLC Limited (ABN 90 000 000 402), 105–153 Miller Street North Sydney,

NSW, 2060, a member of the National Australia Group of companies. It is intended to provide general information only and does not take into account any particular person’s

objectives, financial situation or needs. Because of this, you should, before acting on any information in this document, speak to a

financial adviser and/or taxation professional before so they can help you assess which year-end strategies suit you best.

The tax estimates provided in this publication are intended as a guide only and are based on our general understanding of taxation laws.

They are not intended to be a substitute for specialised taxation advice or a complete assessment of your liabilities, obligations or claim entitlements

that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.

An investment with MLC is not a deposit or liability of, and is not guaranteed by, NAB.

MLC is not a registered tax agent. If you wish to rely on this flyer to determine your personal tax obligations you should

consult with a Registered Tax Agent.

Make insurance affordable this tax year and beyond | 2

1 Includes assessable income, reportable fringe benefits and reportable employer super contributions.2 In 2015/2016.

Hint: click to reveal the answer

Life and TPD insurance in superTax concessions

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1 This can also be the case if the sum insured is increased to make a provision for any lump sum tax that may be payable on TPD and death benefits in certain circumstances.

Life and TPD insurance in super

How could you benefit?

May help you to get higher levels

of cover you otherwise couldn’t afford

Make it more affordable1 to

insure in super

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Recommendation• Adviser recommends $700,000

in Life & TPD insurance so if something unfortunate happens (ie. death or total & permanent disability), Claire can:

– continue to pay off debts (ie. mortgage, school fees)

– maintain the family’s financial position

– have some financial security

• Premium is $10461 in year one• Adviser also recommends Jack

insures in super

Life and TPD insurance in super

Case Study

Tax saving comparison2: insurance inside super -vs- outside super

Premium comparison (in year one)

Insurance purchased inside MLC Wrap Super account (via salary sacrifice)

Insurance purchased outside super (with after-tax salary)

Premium $1046 yearly premium $1046

Plus income tax at 39%3 N/A $669

Pre-tax salary sacrificed/received $1046 $1715 (salary received)

Tax saving $669 N/A

Total saving $377 N/A

Note: This case study is for illustrative purposes only and has been prepared to highlight the importance of speaking to a financial advisor about the benefits of insuring in a super fund.

1 This premium is indicative for illustration purposes only.2 This assumes that the 15% tax on contributions is offset in the super fund by a deduction for the insurance premiums paid.3 In 2015/2016.

Jack, aged 44, is married to Claire, aged 41. Claire is taking a break from the workforce while she looks after their young children. Jack works full-time, earns an annual salary of $100,000 and they have a mortgage.

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• If you have a non-working spouse who needs insurance, you could consider:

– make personal deductible contributions

– benefit from up-front tax concessions

– split some of contributions into spouse’s super account

– get spouse to buy insurance in their super fund.

1 Critical Illness insurance can generally only be purchased in your own name (outside super).

Life and TPD insurance in super

Tips and Traps• Having premiums deducted

from investment account without making additional contributions can help you:

– afford insurance if don’t have sufficient cashflow

– free-up cashflow to purchase other non-super insurances (eg Critical Illness1).

• If you require ‘own occupation’ TPD policy, you may want to:

– buy TPD insurance outside super

– consider TPD Optimiser and utilise the benefits of insuring through super (ie utilising super money to fund insurance premiums) for your “Any Occupation” TPD cover, while having the protection of additional “Own Occupation” cover outside super

– in some circumstances you may need to increase your sum insured inside super to allow for lump sum tax that could apply to the benefit paid.

• With Critical Illness insurance, can reduce cost if ‘connect’ cover with Life and TPD in super1 (ie take cover as extension).

Make insurance affordable this tax year and beyond | 6

Other smart ideas for Income Protection insurance (inside super)

Here are some smart ideas that can help make your insurance more affordable. Hint: click to

reveal the answer

Make insurance affordable this tax year and beyond | 7

Summary

Choose the right premium payment option for you

1 2 3 4Consider Life and TPD insurance in super

Consider Critical Illness cover

Consider pre-paying 12 months’ Income Protection premiums

For more information call MLC from anywhere in Australia on 132 652 or contact your financial adviser.

Postal address MLC Limited, PO Box 200 North Sydney NSW 2059

Registered office Ground Floor, MLC Building 105–153 Miller Street North Sydney NSW 2060

mlc.com.au

MLC companies are subsidiaries of National Australia Bank Limited ABN 12 004 044 937. An investment with MLC is not a deposit or liability of, and is not guaranteed by, National Australia Bank Limited. A126007-0516

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