Life insurance as “tax planning” - termplans's Blog - Blogster
Life Insurance also serves as an excellent mechanism for saving taxes. The Government of India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets. Under Section 88 of Income Tax Act 1961, an individual is entitled to a rebate of 20 per cent on the annual premium payable on his/her life and life of his/her children. The rebate is deductible from tax payable by the individual or a Hindu Undivided Family. This rebate is can be availed up to a maximum of Rs 12,000 on a payment of yearly premium of Rs 60,000. By paying Rs 60,000 a year, we can buy anything upwards of Rs 10 lakh in the sum assured (depending upon the age of the insured and term of the policy.) This implies that we get Rs 12,000 as a tax benefit. But many people make the mistake of burdening themselves with too many life insurance policies to the detriment of the quality of their lives while they’re alive.
Having come to terms with the importance of insurance now comes the dilemma of which insurance policy to choose since the Indian market is already saturated with about 23-odd players, each offering some benefit or the other. This is where IndiaFirst Life, a joint venture between Bank of Baroda, Andhra Bank and UK’s Legal & General, steps in to clear the worries and offer simple easy-to-use solutions. With its “customers first” approach, IndiaFirst Life insurance plan has adopted a simple and transparent approach, doing away with technical jargons and huge policy statements which confuse and confound a customer. At IndiaFirst Life, rather than we telling the customer about an insurance benefit, the customer is the one who chooses an insurance policy. We follow a simple process by which the customer looks into the various policies on our website and makes a choice according to his requirement.
There is not trouble of going through elaborate policy statements involved in this process. Our main is to provide reasonable and honest deals to the customers and not coax him into taking up a policy which he does not want.
Remember, an insurance acts like a ceiling above your head providing you the shelter and protection from any untoward incident. With life having become fast paced nowadays, there are very few things we can hold on to. Our life’s pleasures have become momentary now and if we want to enjoy them for a prolonged time, we must ensure that the little necessities of our life are well insured.
