Term Insurance Plan A Tax Saving Scheme

by Gopal Gidwani on April 13, 2017 · 0 comments

in Financial Planning

Basically, term insurance plans are schemes that offer security against the death of an individual for a scheduled period of time. Based on your needs and age, the period of insurance cover is decided. Those who are seeking for insurance coverage on an immediate basis to protect their family should choose term life insurance.

The main reason for picking term plan is having the assurance that in the case of an unfortunate event of your untimely demise, your family members are protected.

Online term insurance has numerous benefits, the primary one being providing you with a hassle free experience: your policy can be directly accredited to your e-insurance account which completely avoids any kind of paperwork. You can pay online too, using your credit card, debit card, or net banking and get your documents verified online.

Term insurance plans are available with a decreasing period. This means that the premium will always remain the same even when the face value is plummeting each year. A great benefactor of having a term insurance is that it entails several tax benefits. Tax deduction under Section 80C, and Section 10 (10D) of the Income Tax Act are applicable to these plans.

The income tax benefits of paying towards term insurance are in the form of exemptions as well as deductions. You can deduct from your taxable income up to a total of Rs. 1,50,000 in instances such as your insurance payments from gross income under Section 80C of the Income Tax Act. The maturity proceeds and death benefits received from an insurance policy are exempt from tax under Section 10 (10) D of the Income Tax Act.

Most of the term life insurance policies provide with the option to convert from the original term life insurance policy into an individual universal, annual renewable or whole life term insurance policy. They are also renewable, once the term ends. The convertibility permits the insured individual to modify from the original term life insurance policy into a longer lasting term policy, as insurance needs change from time-to-time.

Several working professionals who have either children or dependent parents, decide to purchase life insurance to safeguard their dependents in the event of any unexpected circumstances. If you’re interested in purchasing an online term insurance plans policy, then you can find out more here life insurance.

Leave a Comment

Previous post:

Next post: