During the tax return period, a frequently recurring question is whether and in which cases the annual premium of life insurance policies can be deducted.
In Dutch personal income tax, life insurance premiums are generally not deductible. Tax relief is only available in certain specific cases.
Below is an overview:
1. Term Life Insurance (Overlijdensrisicoverzekering – ORV)
Not deductible if taken out as a private individual.
The paid premium cannot be deducted in Box 1.
Exception:
If the term life insurance is compulsorily linked to a mortgage for owner-occupied housing, the premium is still not deductible — however, under certain conditions, the payout may be tax-free.
In short: ORV premium = not deductible.
2. Annuity Insurance (Lijfrenteverzekering – very important!)
This is the most important exception.
The premium for annuity insurance is deductible in Box 1 if:
You have a pension shortfall (jaarruimte or reserveringsruimte)
The policy complies with tax regulations
It is genuinely an annuity product (not a simple savings insurance)
The paid premium is deductible from personal income tax.
However, the future payout will be taxable.
Commonly used by:
Self-employed individuals (ZZP / eenmanszaak)
DGA’s (director-major shareholders)
Employees who have a pension shortfall
3. General Savings or Investment Life Insurance
Not deductible.
It usually falls under Box 3 (wealth taxation).
4. Endowment Insurance for Owner-Occupied Housing (Kapitaalverzekering eigen woning – KEW)
This applies only to older contracts concluded before 2013.
The premium is not deductible, but under certain conditions the payout may be tax-free.
Short summary (Netherlands)
Term life insurance – Premium deductible? No
General life insurance – Premium deductible? No
Annuity insurance – Premium deductible? Yes (in case of a pension shortfall)
Old KEW – Premium not deductible, payout sometimes tax-free