If you’re a working Singaporean looking to lower your tax bill in 2025, you may be able to take advantage of Life Insurance Relief — a valuable scheme offered by IRAS (Inland Revenue Authority of Singapore) that allows eligible taxpayers to claim up to S$5,000 per Year of Assessment (YA).
With rising living costs, every dollar counts. This relief helps ease the burden by rewarding individuals who contribute to life insurance policies, especially those who don’t qualify for CPF contributions.
Here’s a complete breakdown of what the Life Insurance Relief is, how much you can claim, and whether you qualify for it in 2025.
🧾 What Is Life Insurance Relief?
Life Insurance Relief is a personal income tax deduction for Singapore residents who pay premiums on their own life insurance policies. It’s designed to ensure that those without sufficient CPF contributions can still enjoy tax relief if they’ve invested in private insurance for financial security.
The maximum claimable amount is S$5,000 per year — but this amount is shared with your CPF contributions. That means if you contributed S$4,000 to CPF in the relevant year, you can only claim S$1,000 in life insurance premiums for tax relief.
✅ Who Qualifies for the Relief?
You may qualify for Life Insurance Relief in the Year of Assessment 2025 if all the following apply:
- You’re a Singapore tax resident
- You paid life insurance premiums for your own policy in 2024
- You had less than $5,000 in compulsory CPF contributions in 2024
In general, this relief is targeted at:
- Self-employed persons
- Older individuals not required to contribute to CPF
- Employees earning less or working part-time
- Those without full CPF contributions
💰 How Much Can You Claim?
| Component | Maximum Amount |
|---|---|
| CPF Contribution (compulsory only) | Up to $5,000 |
| Life Insurance Premiums | Balance of $5,000 |
| Total Relief Limit | $5,000 |
👉 Example:
If you contributed $2,500 to CPF in 2024 and paid $3,000 in insurance premiums, your total relief will be capped at $5,000 — meaning you’ll be able to claim:
- $2,500 for CPF
- $2,500 for life insurance
📌 What Insurance Premiums Qualify?
To be eligible for this tax relief, the life insurance policy must:
- Be for your own life
- Be issued by a licensed insurer
- Have annual premiums not exceeding 7% of the sum assured
- Provide capital protection (investment-linked policies may not fully qualify)
Note: Premiums for dependents’ insurance policies do not qualify under this relief.
🔄 Do You Need to Apply?
Yes, unlike some tax reliefs that are automatically granted, you must claim Life Insurance Relief when you file your tax return.
When filing your taxes (typically in March-April 2025), you’ll need to:
- Log in to myTax Portal
- Select “Life Insurance Relief” during the tax form process
- Provide your insurance policy details and premium amounts
Documents You May Need:
- Insurance premium payment receipts or statements
- Policy document showing coverage details
- CPF contribution statement (for income year 2024)
While IRAS may not ask for these documents during submission, you should keep them for at least 5 years in case verification is needed.
Common Mistakes to Avoid
- Claiming premiums paid for spouse or children – not allowed
- Exceeding the relief cap – total CPF + Life Insurance must not exceed $5,000
- Using non-qualifying policies – investment-only or short-term policies may not be eligible
- Incorrect CPF calculations – use only compulsory contributions, not voluntary top-ups
Why This Relief Matters in 2025
As inflation continues to impact household budgets, smart tax planning is more crucial than ever. Life Insurance Relief can help:
- Lower your taxable income
- Maximize your tax savings
- Encourage long-term financial protection
For self-employed individuals and those without CPF, this relief can provide hundreds of dollars in tax reductions.
Final Thoughts
The Life Insurance Relief 2025 is a powerful but often overlooked way for Singaporeans to reduce their tax burden while planning for their financial future. If you’ve taken the initiative to protect yourself with a life insurance policy, don’t miss the chance to claim up to $5,000 off your taxes.
Be sure to file your claim correctly, stay within the limits, and keep supporting documents handy — it could make a real difference to your 2025 finances.