Taxes: is life insurance tax deductible?

bbm_175281126.jpg

If you are considering taking out a life insurance policy, it would be worthwhile to learn about the tax benefits which you would be entitled to. Everything will depend on the type of life insurance and whether you meet a certain number of (strict) conditions.

The term 'life insurance' covers a whole series of different types of insurance.

Pension savings

With a pension savings insurance, i.e. individual life insurance which is part of the third pillar of the pension system, the premiums entitled you to a tax credit in the framework of pension savings. The maximum amount for 2019 (fiscal year 2020) is:

  • €980 (tax benefit of 30%)
  • or €1260 (tax benefit of 25%)

WHAT ARE THE CONDITIONS IN THIS CASE?

  • You must be an inhabitant of Belgium or another member state of the European Economic Area when you take out the contract;
  • You must be at least 18 years of age and under age 65 at the time of the conclusion of the contract;
  • The pension savings contract must have existed for at least 10 years;
  • You are the beneficiary in the case of survival. 
  • The beneficiary in the case of death must be: 
    • when the contract serves as a repayment of or a guarantee for a loan for the purchase or maintenance of property:  
      • equal to the capital insured serving as a repayment of or a guarantee for the loan, the people who will acquire the full ownership or the usufruct of the property, following the death of the insured.
      • for the rest of the capital insured, your spouse or legal cohabitant or relatives up to the second degree.
    • in all other cases: your spouse or legal cohabitant or relatives up to the second degree.

Long-term savings

Long-term savings premiums in the framework of the third pillar of the pension system – which may also be considered as a sort of life insurance – are tax deductible. The policyholder must be the same person as the insured, and must also be the beneficiary in the case of survival. In the case of death, only the spouse and the relatives up to the second degree may be the beneficiaries. The contract must be taken out before age 65 and the contract with a benefit in the case of survival must have existed for at least ten years. In 2019, the maximum deductible amount is €2,350 (fiscal year 2020). The amount which a person may pay in the framework of long-term savings depends on his or her income. It is also important to bear in mind that the capital and interest repayments for a mortgage loan may already fill your tax basket completely and thus prevent you from receiving a long-term savings tax benefit. 

The premiums for outstanding balance insurance are also tax deductible. It is not always worthwhile to deduct these amounts, above all if the maximum sum has already been reached with capital and interest repayments.

If life insurance/death insurance has been taken out by a self-employed person, the premiums may be deductible, if the insurance is intended to cover certain professional obligations. The tax deduction of life insurance premiums is accepted, provided that they serve as a guarantee for a professional loan. In this case, these premiums will be considered as professional fees. This is also the case if the contract meets the conditions for a PSPS.


A life insurance at NN offers you a lot of advantages: discover them here.