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# Life Insurance Relief

Life insurance relief means you can claim for annual insurance premiums paid on life insurance policies bought on your life and the life of your wife or spouse.

## Qualifying for Life Insurance Relief

In order to claim this relief for the Year of Assessment (YA) 2016, you must satisfy all these conditions:

• Your total compulsory employee (CPF) contribution or self-employed Medisave/Voluntary (CPF) contribution or both in 2015 is less than \$5,000
• You must have paid insurance premiums in 2015 on your own life insurance policies or on insurance (of which you are the policy holder) bought on your wife's life
• The insurance company must have an office or branch in Singapore if your policies are taken on or after 10 August 1973.

Life Insurance relief cannot be claimed on premiums paid on an accident and health policy that provides for the payment of policy monies on the death of a person. Such a policy is not a life insurance policy.

Importantly, life insurance relief does not extend to life insurance policies purchased by a married woman for her husband. The relief also does not extend to life insurance policies purchased by parents for their children.

## Amount of Relief

You are not eligible for Life Insurance Relief for YA 2016 if your total compulsory employee CPF contribution in 2015 is \$5,000+

If your CPF contribution is less than \$5,000, you may claim the lower of:

• The difference between \$5,000 and your CPF contribution
• Up to 7% of the insured value of your own or your wife's life or the amount of insurance premiums paid, whichever is lower.

## Total Compulsory CPF Contribution is Less than \$5,000

Mr Ong bought a life insurance policy for himself. The insured value of his life is \$50,000. He paid annual premiums of \$3,800 in 2015. His total compulsory employee CPF contribution is \$1,600. Workings shown below.

 Life Insurance Value \$50,000 Annual Premium in 2015 \$3,800 Compulsory Employee CPF Contribution \$1,600

Firstly calculate the difference between \$5,000 and his CPF.

 Maximum Ceiling on Employee CPF Contribution \$5,000 Mr Ong’s Compulsory Employee CPF Contribution \$1,600 Difference \$3,400 (\$5,000 - \$1,600)

Secondly compare 7% of the insured value against the premium paid.

 Life Insurance Value \$50,000 7% of the Life Insurance Value \$3,500 (7% X \$50,000) Total Annual Premium in 2015 \$3,800 The lower amount is \$3,500

Finally compare amounts in the above steps. Pick the lower amount.

 Difference between \$5,000 and Total Compulsory Employee CPF Contribution \$3,400 Step 2: Lower amount of Life Insurance Value and Total Annual Premium \$3,500 The lower amount is \$3,400

Mr Ong is eligible for \$3,400 Life Insurance Relief for YA 2016.