Tax Deduction for Life Insurance Premiums: Get a Refund with Your Income Tax Return

Every year, taxpayers must report their income and expenses to the Italian tax authorities to calculate the taxes owed to the state and the deductions that entitle them to a financial refund.
Among the list of deductions are mainly expenses related to home improvements (renovations and installation of green energy systems), education, health, and support for dependent family members.

But that's not all: according to the TUIR (Consolidated Income Tax Act), Article 15, Paragraph 1, the costs of real estate transactions, sports activities, and especially life insurance premiums are also included.

This deductibility of premiums allows clients to save on the total costs incurred for taking out a life insurance policy.

How the Deductibility of Insurance Premiums Works

To claim deductions, you need to include the relevant codes for your life insurance policy in the dedicated fields when filing your income tax return using Model 730 or Unico.

For life insurance contracts signed before December 31, 2000, a 19% deduction on the premiums paid is available, provided that the contract duration is not less than 5 years.

The same 19% deduction is available for policies signed after January 1, 2001, provided that the insurance coverage includes one of the following conditions:

• risk of death;
• risk of permanent disability greater than 5%;
• risk of inability to perform daily activities.

Amount of Deductions

For temporary death or permanent disability insurance, the maximum deductible premium amount is 530 euros. With a 19% tax benefit, the maximum refund is 101 euros.

If the contract also includes coverage against the risk of inability to perform daily activities, the maximum deductible expense is 1,291.14 euros, with a maximum refund of 245 euros (with the same 19% deduction).

If the premium exceeds 530 euros for the first case described and 1,291.14 euros for the second case, the excess amounts will not be considered in the deduction calculation.

After completing the income tax return, for potential tax audits, it is advisable to keep copies of the premium payment receipts and the insurance contract, which should include:

• details of the policyholder and the insured;
• type of coverage;
• start date of the policy;
• amounts paid.