To Ease your Doubts... Tax Deduction up to 300,000 Baht
For tax deduction, we are all familiar with tax deduction right from general life insurance premiums for the first 100,000 Baht. When the right is exercised, that’s it; not many people pay attention to tax deduction of another 200,000 Baht despite the fact that there is another helper in exercising the tax deduction right up to 300,000 Baht, for example, annuity life insurance. Many people may not be very familiar with annuity life insurance, or they might think that there’s still a plenty of time left to buy before retirement. Nevertheless, believe me, this is another type of insurance providing more than just coverage, with many benefits, Let Muang Thai Life Assurance explore with you as always on how annuity life insurance can be used as a tax deduction.
What is annuity life insurance? How can you exercise your tax deduction right?
Annuity life insurance is an insurance type that focuses on returns rather than coverage, similar to savings insurance we are familiar with. The difference is that savings insurance pays us "cashback" which will be paid back gradually during the contract, but for annuity life insurance, no benefit will be paid before retirement. Instead, the benefit will be paid in the form of "annuity" every year or every month from the start of retirement (age 55 onwards) until the age specified in the policy. Tax deduction right is available as charged up to 15% of income but not more than 200,000 Baht. Conditions of annuity life insurance for filing tax deduction are as follows:
- Must be annuity life insurance with coverage period of 10 years or more;
- Must be annuity life insurance with the following wordings specified "tax deductible ";
- The first benefit payments starts from the age of 55 - 85 or more;
- No other benefits are paid before receiving the annuity except for death benefit;
- No other benefits are paid on the premium payment due date or the last policy anniversary before receiving the annuity;
- Annuity benefit payments during the annuity period must be made on a regular basis, such as annually and monthly. The insurance must be made with a life insurance company operating in Thailand only.
In this regard, when combined with the Provident Fund, the Government Pension Fund, Private Teacher Aid Fund, Retirement Mutual Fund (RMF), Super Saving Funds (SSF) and National Savings Fund (NSF), the amount must not exceed 500,000 Baht. There are 3 methods to exercise the tax deduction right with annuity life insurance premiums.
Tax deduction for the last 200,000 Baht and tax deduction right for the first 100,000 Baht
Option 1: Exercise tax deduction right for the last 200,000 Baht and tax deduction right for the first 100,000 Baht
Normally, we are familiar to taking advantage of tax deductions from general life insurance premiums and combined life and health insurance to request the tax deduction of 100,000 Baht, once combined with annuity life insurance premiums which is tax deductible up to 200,000 Baht, the tax deduction right is up to 300,000 Baht. In this case there is a condition that the tax deduction from annuity life insurance premiums must not exceed 15% of income. Now, let’s try to find an annuity insurance plan suitable for you and then apply to receive both coverage and benefits.
If you do not exercise the tax deduction right from general life insurance premiums, you can exercise the right from annuity insurance premiums up to 300,000 Baht
Option 2: If you do not exercise the tax deduction right from general life insurance premiums, you can exercise the right from annuity insurance premiums up to 300,000 Baht.
For anyone who has no life insurance or health insurance but interested in buying the annuity life insurance, we can assure that the insurance is tax deductible. Annuity life insurance premiums tax deductible up to 300,000 Baht: tax deduction for both the first 100,000 Baht and the last 200,000 Baht, once combined with other deductible rights, you can see that the tax deduction amount is satisfying.
Tax deductible for the first 100,000 Baht and the last 200,000 Baht.
Option 3: Tax deductible for the first 100,000 Baht and the last 200,000 Baht.
For the general life insurance that we have, if the first 100,000 Baht of the tax deduction has not yet been exercised, we can include the premiums of the annuity life insurance. You can also exercise the tax deduction right for the last 200,000 Baht of annuity life insurance premiums in full amount as well. It is considered another worthy deal that allows us to receive both coverage and long-term benefits after retirement.
In addition to paying annuity during retirement, annuity life insurance (tax deductible) also provides tax deduction right. For more benefits, you should start planning early to reduce financial risks in later life. You can also choose to receive coverage that suits your needs based on your future goals. Muang Thai Life Assurance therefore recommends Muang Thai Return Retire Campaign which is tax deductible and also guarantees benefits after retirement. Pay premiums for only 5 years and receive annuities until the age of 85 years, 20% per year (1), up to 520% (1), with life coverage before retirement up to 150% (2). Retire with peace of mind with annuities paid after retirement every year.
(1) % of the initial sum insured
(2) % of the paid premium
Remarks:
- Coverage period of the rider must not exceed the coverage period of the life insurance policy that this rider is attached to.
- Underwriting is subject to the Company’s rules.
- Premium is eligible for tax deduction. Conditions are as specified by the Revenue Department.
- Please study the details of coverage, conditions and exclusions before deciding to purchase insurance.