Home Insurance Insurance Basics – Part I

Insurance Basics – Part I

133
0
SHARE

 Insurance 

 Insurance  is the lifejacket you wear in a storm, the umbrella that shields you in a downpour, It does not prevent these events from taking place, but makes sure that their impact is lessened and that you have something to hold on to.

It gives you the financial security and certainty to deal with the aftermath of these events. It becomes the earning member of the family and supports you and your family during the rough times.

Why Life  Insurance 

Protection

You need life  insurance  to be there and protect the people you love, making sure that your family has a means to look after itself after you are gone. It is a thoughtful business concept designed to protect the economic value of a human life for the benefit of those financially dependent on him. That’s a good reason.

Supposing you suffer an injury that keeps you from earning? Would you like to be a financial burden on your family, already losing out on your salary? With a life  insurance  policy, you are protected. Your family is protected.

Retirement

Life  insurance  makes sure that you have regular income after you retire and also helps you maintain your standard of living. It can ensure that your post-retirement years are spent in peace and comfort.

Savings and Investments

 Insurance  is a means to Save and Invest. Your periodic premiums are like Savings and you are assured of a lump sum amount on maturity. A policy can come in really handy at the time of your child’s education or marriage! Besides, it can be used as supplemental retirement income!

Tax benefits

Deductions from gross income on Life  Insurance  premium paid (Traditional & Unit Linked Plans)

Under Sec 80C of Income Tax Act

Available for Premium paid (max. up to 20% of SA) on Life  Insurance  policies with a maximum ceiling p.a. Rs. 1,00,000 irrespective of the Gross Total Income.

A maximum of Rs. 1,00,000 p.a. paid as a contribution on a pension plan is fully deductible from the taxable income (within the max. ceiling Rs. 1 lakh )

Under Sec 80D of Income Tax Act

Premium paid for Critical Illness rider is deductible as medical  insurance  premium from the annual income chargeable to tax up to a maximum amount of Rs. 15,000.

Exemption from the Life  Insurance  proceeds

Under Sec 10(10D) of IT Act

Maturity benefits are tax-free in the hands of the policyholder if, at any point of time during the policy life, premiums paid within one year do not exceed 20% of the basic Sum Assured.

Death benefits are tax-free.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

5 × three =