Image result for life insurance“Being prepared is important, knowing how to wait is even more important, but taking advantage of the right moment is the key to life.” Arthur Schnitzler  

Do you think about hiring a life insurance and you get overwhelmed? Do you think it’s a mess and an unnecessary expense? Maybe you do not know that you can get tax relief or have some tax benefits thanks to your life insurance , as well as being able to be calmer in your day to day in case of unforeseen events, of course. We go in parts:

 

Do you have life insurance associated with the mortgage of your habitual residence and you contracted it before January 1, 2013?

Good news ! You can add what you have paid in the life insurance premiums (and also the household one if it was associated with the mortgage) to the mortgage payments and deduct your statement . Yes, the maximum, adding quotas and insurance, is 9,040 euros, on which the Treasury will reduce 15%.

By presenting a simple certificate from your insurer to the Treasury, you can benefit from the rebate.

If you did not know it, and until now you have not gotten rid of life insurance, remember that you can fill out a letter to claim the money from the Treasury explaining the subject.

 

And what happens when the insurance is collected?

Taxation depends on the circumstances:

  • In case of permanent disability: the benefits you receive as insured and beneficiary, you will be taxed by the Personal Income Tax, that is, the IRPF . If the case comes you will have to check if you can benefit from reductions according to the degree of disability.

 

  • In case of death, if the beneficiary is a natural person (not a company or similar), the capital will be taxed in the Inheritance and Donations Tax . In this case, it is important to note that some insurers, not all, offer as an added advantage an advance of the capital to liquidate this tax . It is something that can be very useful for family members or whoever is a beneficiary of insurance at such a hard time both emotionally and economically.

And remember that, if you do not have life insurance associated with a mortgage before 2013, while the insurance is in force , that is, until the time comes to collect the beneficiary, it does not have any fiscal repercussions .