Life insurance is a crucial part of financial planning, but many taxpayers in Singapore are unsure when their life insurance premiums can actually be claimed as a tax deduction. This guide explains the specific conditions under which premiums are deductible for Year of Assessment (YA) 2025 and how you can optimise your claims.
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📌 Understanding Life Insurance Premium Deductions
In Singapore, life insurance premium deductions are not automatically available to every taxpayer. The Inland Revenue Authority of Singapore (IRAS) allows such deductions only under specific circumstances, primarily linked to the earned income relief framework and certain CPF contribution shortfalls.
✅ When You Can Claim Life Insurance Premium Deductions
You may claim a deduction for life insurance premiums if:
- Your CPF contributions (including compulsory and voluntary contributions) in the preceding year are less than $5,000.
- The policy is for your own life, or for your spouse’s life if you are financially supporting them.
- You have paid the premiums from your own income and not been reimbursed by your employer.
- The policy is a life insurance policy (not investment-linked purely for returns).
The deduction is limited to the shortfall between $5,000 and your total CPF contributions for the year, subject to the actual premiums paid.
🚫 When Life Insurance Premiums Are NOT Deductible
- If your total CPF contributions for the year are $5,000 or more.
- If the policy is for investment purposes only, such as an endowment plan without protection elements.
- If your employer has already paid or reimbursed the premiums.
- If the policy is for someone other than yourself or your financially dependent spouse.
📄 How to Claim in Your Tax Return
- Log in to myTax Portal during the annual tax filing period.
- Navigate to the “Deductions, Reliefs and Rebates” section.
- Select Life Insurance Relief and enter your premium amounts paid.
- Ensure you have your insurance premium receipts and proof of CPF contributions for verification.
- Submit your return and retain documents for at least 5 years.
💡 Tax Planning Tips for Maximising Life Insurance Deductions
- Track CPF Contributions: If you are self-employed or have irregular CPF contributions, you may have a better chance of qualifying.
- Combine with Other Reliefs: Pair life insurance relief with other personal reliefs to significantly lower your tax bill.
- Keep Policies Simple: Policies that are clearly life protection plans (not complex investment products) are easier to justify to IRAS.
- Annual Review: Reassess your CPF contributions yearly to check eligibility for this relief.
📌 Final Thoughts
While not everyone qualifies for life insurance premium deductions, understanding the eligibility rules can help you plan ahead and possibly unlock this relief. For YA 2025, review your CPF contributions, assess your policy type, and make sure to file your claim correctly to avoid missing out on valuable tax savings.
