Term insurance is an insurance policy that gives coverage for a specified period. If during the term of the insurance, the policyholder dies, a death benefit will be given. The premium paid will be eligible for tax benefits. A tax deduction of about Rs 1.5 lakh could be claimed every year for the premium for you, your spouse, and children.
Benefits of Term Insurance policies that will save your taxes
People have various needs for which they buy term insurance that is differentiated from one person to another. Some of the benefits of a term insurance plan include:1. Helps to Secure the Family
A term life insurance is a must for an individual who is the sole bread earner of the family because if something happens to you, the insurance policy will be paying for the cover to your family. As a result, in your absence, there will not be any financial burden on your family.2. It helps to safeguard Against the Liabilities
We may incur many liabilities such as when buying a home or a new car etc. In case anything happens to you, your family becomes responsible for the repayment of these loans unless you are covered under a term life insurance. It provides your family so that they can manage such financial problems.3. It has a lot of benefits for the Nuclear Families
These days, Joint families are increasingly turning into nuclear families. Hence, your family has only you as a support system and if you choose not to buy a term life insurance, then just in case of your absence, your family may or may not be able to deal with the tough circumstances. 4. Term Life Insurance is not that expensive
A term insurance policy can be bought at a good price. For instance, a risk cover of 50 lakh rupees for a male of age 25 years will be only around Rs. 4184 every year. This is basically less than even Rs. 12 each day. And if a term life insurance is bought at a very early age, then the monthly premium that you pay will also be lesser.You may also like: Everything about Tax Saving Health Insurance Policies
Tax benefits of Term Insurance Policies
A tax saving term insurance policy helps to give the tax benefit to the policyholders under two sections of the Income Tax Act of 1961. These sections include:1. Section 80C
- A term insurance benefit can be availed under this section of the Income Tax Act on the taxability of income. This will be availed on the premium that is paid on the policy. The premium paid will be up to the maximum limit of Rs.1.5 Lakhs, which will be eligible for the exemption of taxes under the section 80C of the IT Act 1961.2. Section 10(10D)
- The maturity benefits under the term insurance policies are eligible for exemption of taxes under section 10(10D) of the Income Tax Act of 1961.
List of Tax saving Term Insurance policies
All of these policies can be availed for the tax benefits under the Income-tax Act of 1961.
Certain tax benefits can be availed by the policyholders under the sections of the IT Act of 1961. Some of the plans offered by the company can be easily converted to other plans. Some of the term plans offered by Max Life include Max Life Online Term Plan, Max Life Premium Protection Plan, and Max Life Super Term Plan.
The term insurance plans that are offered by the ICICI Prudential basically aim to protect the family of the insured policyholder. The various term insurance policies offered by the company include PRU iProtect Term Insurance Plan, ICICI PRU iCare II Term Insurance Plan, ICICI Prudential Loan Protect, ICICI Prudential Sarv Jana Suraksha, ICICI Prudential Life Raksha, and ICICI Prudential Loan Protect Plus.
The term insurance policies under this scheme don't offer the loan facility against the sum assured or the premium paid. The policies offered by the company include Online Term Insurance Plan, Term insurance Life Protection, and Term insurance Sampoorn Suraksha Micro- Insurance plan.
Bharti is offering two-term insurance plans including Bharti AXA Life eProtect+ and Bharti AXA Life eProtect. Under the section of the IT Act, 1961, tax benefits can be availed by the policyholders.
The company offers a range of term insurance plans. Each of these plans come with some benefits. These plans include Aviva life Shield Plus, Aviva I Life, Aviva i-Shield, Aviva i-Life Secure, Aviva Life Shield Advantage, Aviva Life Shield Platinum, Aviva Extra cover and the Aviva Sampoorna Suraksha Plan.
Other tax-saving Term insurance schemes include the following:
- Kotak Life Term Insurance Plans
- DHFL Pramerica Term Insurance Plans
- IndiaFirst Term Insurance Plans
- Edelweiss Tokio Term Insurance Plans
- Aegon Life Term Insurance Plans
- Canara HSBC Term Insurance Plan
- Future Generali Term Insurance Plans
- Birla Sun Life Term Insurance Plans
- PNB MetLife Term Insurance Plan
- SBI Life Term Insurance Plan
Image Source: allindiaitrAlso Read: Tax Saving Investments: Save your taxes beyond Mutual Fund