Life insurance in superannuation

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Life insurance in superannuation

a. If a term life insurance premium is $1000 and the client decides to pay their premium out of after-tax dollars how much pre-tax income will an individual need if their marginal tax rate is: (1) 0% (2) 19.0% (3) 32.5% (4) 37.0% (5) 45.0%

b. If a term life insurance premium is $1000, how much pre-tax income will an individual need if they decide to salary sacrifice their premium into superannuation?

c. Besides the cost differential between (a) and (b), what are the advantages/disadvantages of paying term life insurance premiums through a superannuation fund versus paying for them out of after-tax dollars?

Reference no: EM131975376

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