Today, I'll attempt to elucidate on how taking up insurance policies helps you reduce your tax to the bearest minimum.

To a very large extent, only life insurance policies that have elements of risks can be used to reduce your tax. In Nigeria, with the introduction of the Bank Verification Number (BVN) linking all your accounts and Tax Identification Number (TIN), we are gradually getting to a point where your tax will be calculated to mathematical certainty and you will be notified Short Message Service (SMS) even though it is deducted at source for employees on a Pay As You Earn (PAYE) basis. For private business men, you are not exempted too. The tax authorities will not need to run afer you before you comply due to improved operational efficiency and technological advancement.

According to Adebisi and Gbegi, 2013, they postulated that "Irrespective of its values, tax evasion drastically reduces the amount of state budgets every year all around the countries globally. Tax evasion denies every government the tax revenue due to the system, which results in a gap between the potential and actual tax collection". When you deny the government an amount due to them in the form of tax, there will be grave consequences. Taxes are used to provide for national programs as defence; provision of social amenities like good roads, school, health care programs and amenities that improves human life. Therefore, any action taken to evade the assessment of tax, be it personal income tax or otherwise can land you in prison. However, our focus today is to show you why you need LIFE INSURANCE that gives you *tax advantage* and reduces your tax liabilities legally as long as you are alive. This is the choice of the wise, embrace it.

Let us attempt to cite an example. If you if you are paying twenty percent (20%) tax on your income and you have a *Life Insurance Policy* where you pay a premium of ten percent (10%), your tax will be reduced to ten percent (10%) according to the value of your policy. This gives you not only a huge tax rebate but also a life insurance benefit. Hear this quote by Suze Orman, "If a child, a spouse, a life partner or a parent depends on you and your income, you need life insurance. We all know our date of birth, but no one knows their date of death. As a breadwinner, in other not to throw your family to the uncertainty of life in the event of death (A debt we must all pay), you need a comprehensive life insurance that will grow with you.

If you are conversant with the workings of the contributory pension scheme in Nigeria, you will realise that you can also use the Additional Voluntary Contribution (AVC, accessible after 5 years now I think). AVC is the additional amount you contribute asides your employers statutory 10 percent and own 8 percent from your basic, housing and transport as access tax holiday, but this is not accessible annually. On mortage, you are also given some consideration and also on your children, the rebate is just about N2,500 (Two thousand Five Hundred Naira) per child for a maximum of 4 children per family. This puts insurance in an advantageous position, naturally. It is like your money coming back to you and they are all consolidated relief.

How To Access Tax Rebate With Beneficial Life Insurance Policies

(a) Take up a Life Insurance policy with a licensed insurance company.
(b) Pay your premium annually, semi-annually or monthly.
(c) Request for a tax rebate certificate from your insurer from the 1st of January every year. (I usually process and send you your certificate before you even ask).
(d) Submit it to your Accounts Department or the section in-charge of your tax for processing. It will usually show all the amount you paid in a year for insurance. What a smart way to knock down your tax.
(e) The rebate shall be computed based on your insurance premium and returned to you in arrears.
(f) Enjoy this plan and tell the beautiful story to your colleagues and friends, so that they too can benefit.

Babatunde Raimi holds a B.Sc. (Ed) and Masters of Business Administration from the prestigious University of Lagos. He is a Licensed by the National Insurance commission as a certified Insurance Agent. He belongs to a number of professional and socio-cultural bodies and is currently a Unit Manager with Nigeria's largest and number one life insurer, American International Insurance Company. He consults widely, especially on insurance, pension, retirement, tax, investment and manpower development. Babs., as he is fondly called is an author with 4 books credited to his name. Some of his published books are *Planning Your Retirement, The Beauty Of Tragedy, Beyond Salary and Musings By Babatunde Raimi (A Collection of about 325 poems).* All his literally works written for the benefit of mankind were published in the United States of America with awards locally. His first book Planning Your Retirement was featured in the largest bookfair in the United States which held at the University of California, Los Angeles (2016). His life goal is to liberate his generation from the plague of ignorance; providing intellectual solutions to the ills bedeveling our world. For this, he travels a lot. He writes on newspapers and is constantly being featured on national televion and radio stations promoting his vision. He can be reached on social media by just Googling (Babatunde Raimi).

For bookings, please call, text, whatsapp: +2348178827380 or +2348035063895, Email: babatunde.raimi@aiicoplc.com, babzybabs@yahoo.com

I have a few questions on this especially on some policies like cash accumulation plan, flexible endowment plan, child education plans...

1. Are they all tax exempt?
2. If i do a 10yr cover and do not die within this period, do i get a payout and if yes, is the payout taxable?
3. What is reversionary bonus?