Do I have to pay tax on Life Insurance payouts or premiums?
Thursday 16 March 2023, 10:49AM
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If you or your family find yourself claiming on your life insurance policy, you've had some bad news. However, this is why you decided to take out a policy in the first place – to help put food on the table, pay the bills, and support the loved ones you leave behind in any way you can.
One of the most common questions we get asked at Pinnacle Life is, "do I have to pay tax on a life insurance claim payout?". The good news is that the answer is no, as long as the owner is a person. In New Zealand, you don't pay tax on life insurance payments you or your estate receive– so you can calculate the exact amount of cover you need with the added comfort of knowing you'll receive the full amount at a time that is already stressful. In other words, payments related to Life Cover and any Critical illness benefits are tax-free.