Life insurance is a contract between you and the insurance company, which plays an important role in tax deduction plan. By investing in a life insurance plan, you can claim deductions from your taxable income as per the provision of the income tax Act,1961. That means the insurance premiums you pay, help in reducing your tax liabilities.
There are various kinds of insurance one can choose from like Term insurance, health insurance, motor insurance, property insurance etc. When it comes to insurance, one can go ahead with Myriskcover one of the trusted insurance companies.
The term insurance plans are effective insurance policies that provide financial safety to your family and loved ones in your absence. You will make the premium payment to keep the policy in effect for a specified period as desired by you. In this policy there is no return for the premium paid. This plan is specifically designed to provide the beneficiaries with the sum assured on the death of the policyholder and the policy ceases to exist.
Apart from term insurance, there are traditional polices which gives certain returns on maturity and during the period of the policy, if the insured dies, the sum assured, along with loyality additions, if any is given to the nominee. Different combinations of this traditional policy is available now. Policies like money-back policies, guranteed returns as pension for a certain period,etc. Unit-linked Policy which is oflate vigoursly promoted by insurance companies, is linked to market. There is no guarantee given by the insurer. If market conditions are good, the Fund grows on the contrary, Fund degrows.
The tax deduction under the income tax act sec80cc you can claim the amount paid towards any of the above mentioned plans are to a maximum claim of Rs.1,50,000/- under this section.
In the case of some life insurance products, maturity proceeds also come under exempted income. This means, no tax is payable on the benefits received on maturity or death, subject to provisions of section 10(10D) Hence life insurance product is one of the best ways to ensure that your family is always protected while enjoying benefits.
Under section 80D of income tax, you can claim a deduction of Rs. 25,000 on insurance for self, spouse and dependent children. An additional deduction for insurance of parents is available up to Rs 25,000, if they are less than 60 years of age.
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