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Tax advantages for term insurance 

Term insurance is a financial security alternative for an individual to safeguard the future of your family members. The nominee will be compensated in accordance with the terms of the policy in the event of an accident, disability, or death of the policy holder.

Author:IndiaFirst Life | Date:16 Dec 2022 | Time:09:25:00

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What Is Term Insurance?

Term insurance is a financial security alternative for an individual to safeguard the future of your family members. The nominee will be compensated in accordance with the terms of the policy in the event of an accident, disability, or death of the policy holder. The primary benefit of term insurance is that it is usually affordable, and the policyholder receives tax exemptions & additional benefits like riders etc. 

Term insurance policies are simple to comprehend and affordable:

One of the reasons for term insurance's growing popularity is its simplicity. Term life insurance is a simple life insurance policy that pays out the sum insured to your dependents upon your death. All you have to do is make sure the premium is paid on time.  

A term life insurance premium might be as little as 0.1 percent of the total sum insured. 

Tax Benefits of Term Insurance Plan:

Along with securing your family’s future with a term, you can also save money on taxes with it. Let's take a look at its three-term life insurance tax benefits. 

Section 80C

Under this section, you can claim a deduction of up to Rs 1.5 lakh for certain investments and purchases, including the term life insurance premium. 

Term life insurance premiums up to Rs. 1.5 lakhs can also be claimed under this provision. 

To be eligible for these deductions, you must meet the following requirements: 

1. Total premiums in a year should not exceed 10% of the sum assured. If the premiums exceed 10%, deductions will be applied proportionately. 

2. According to Section 80C (5), the policyholder is not eligible for the benefits under Section 80C if the policy is voluntarily surrendered or terminated two years prior to the policy's maturity. 

Section 10(10D):

The amount of sum assured that the insured receives at the maturity or surrender of the policy is exempt from tax under section 10(10D) of the Income Tax Act subject to conditions laid out under section 80C. Any such sum received in the event of the insurance holder's death is exempt from taxation.  

Please Note: Income Tax benefits will be made available as per the prevailing income tax laws, subject to fulfillment of conditions stipulated therein. Income Tax laws are subject to change from time to time. IndiaFirst Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in documents/mail. To know the tax benefits available to you, please consult your own tax consultant. 

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IndiaFirst Life

Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 663 crore, is one of the country's youngest life insurance companies. Our key differentiators are our simple, easy-to-understand products that are fairly-priced and efficiently serviced.We offer a diversified suite of over 46 need-based products & Riders (as of 31st March 2022) catering to varied customer segments, leveraging multiple distribution capabilities and augmenting various investment options. In all, propositions under the categories of Protection, Assured Savings, Wealth, Pension, Health and Group Funds for Employee Liabilities form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and competitively priced with risk management being our core strength.

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