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Life Insurance for Tax Benefits

Purchase a life insurance policy which you feel is suitable for you as it not only offers you protection but also offers tax benefits under Section 80C of the Income Tax Act, 1961 and Section 10(10D) of the Income Tax Act, 1961.
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There are many life insurance plans out there from various insurance companies that can help you save on tax under various sections of the Income Tax Act, 1961.

Tax can be saved by way of deductions and exemptions, as explained below.

Saving on Tax with Life Insurance:

Deductions:

Section 80C:

There are many investments that can help you save on tax under Section 80C, the most popular and beneficial of which is investing in a good life insurance policy.

    • This deduction is available for individuals and Hindu Undivided Families (HUF).
    • The maximum amount that can be exempted from taxation under Section 80C, 80CC and 80CCE is Rs.1,50,000.
    • Deductions are only allowed for Premiums up to 20% of the Sum Assured, if the amount of Premium paid in a particular financial year for a policy is in excess of 20% of the actual Sum Assured. This is relevant only to policies that were issued before 31 March 2012.
    • In the case of insurance policies issued on or after the 1st of April, 2012, the deductions are only allowed for so much of the premiums payable as don’t exceed 10% of the actual capital Sum Assured.
    • If the benefit has been claimed under this section, and the policy has been terminated or annulled within 2 years from the commencement of the policy, the benefit will be reversed. This is relevant to all life insurance policies, except ULIPs.
    • If the benefit has been claimed under this section, and the ULIP has been terminated or annulled within 5 years from the commencement of the ULIP, the benefit will be reversed.

Exemptions:

Section 10 (10D):

    • Any amount received under a life insurance policy qualifies for this deduction. A sum received could be:
      • Sum allocated by way of bonus
      • Survival benefit
      • Maturity benefit
      • Surrender value
      • Death benefit
    • This deduction also applies to proceeds and gains from a ULIP.
    • The policy proceeds will be taxable under the following circumstances:
      • Payouts on annuity or pension plans.
      • Group life insurance plans sponsored by employers.
      • Policies bought between the 1st of April 2003 and the 31st of March 2012, whose premium in any year is more than 20% of the Sum Insured.
      • Policies bought after 1st April 2012, if the premium in any year is more than 10% of the Sum Insured.
      • Policies bought after 1st April 2013 for disabled people or those suffering from ailments as under Section 80DDB, if premiums on these policies are more than 15% of the Sum Assured.

The conditions above do not apply to death claims, or any amount received on the death of the life insured.

    • There is no cap on maximum deduction allowed under Section 10 (10D).

* The above data is taken from the Income Tax Act, 1961, and tax laws are subject to change. Please check the latest information of tax saving instruments under the abovementioned sections before making any financial decisions. Check with your insurance provider on the tax saving opportunities under various sections before signing your policy document.

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Life Insurance Reviews

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  • LIC Life Insurance
    "Average"
    0.5 3.0/5 "Satisfactory"
    I have chosen 2 policies, long term and money back. LIC is good but they will provide the information only If I request them. Paying monthly 2500 rupees through ECS. I did not see any benefits and have no access for online. Every 5 years once they are giving bonus on the money back plan.
    Was this review helpful? 0
    , hosur
    Reviewed on Jan 14, 2019
  • LIC Life Insurance
    "Good policy"
    0.5 4.5/5 "Excellent!"
    I have taken 4 policies with LIC from long back. Its a mixed of endowment, money back and life insurance policy for family. I am satisfied with the benefits. If there is any problem I can manage the account online. I pay the premium by cash or cheque, its hardly around 1300 or 1400 rupees every quarterly and also monthly premium has been done.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 14, 2019
  • LIC Life Insurance
    "Good policy"
    0.5 5.0/5 "Blown Away!"
    I have a life insurance policy with LIC and it was taken almost now 10 years through an agent. The tenure period is 21 years and its a JEEVAN ANAND. The benefits are quite good. I never contacted the customer service, I go through with an agent. I make the premium through online every quarter.
    Was this review helpful? 0
    , thiruvananthapuram
    Reviewed on Jan 14, 2019
  • HDFC Life Life Insurance
    "Very Good Service"
    0.5 4.0/5 "Great!"
    I had taken this insurance policy almost five years back and i had been paying the premium on an annual basis. The premium amount was not too high and the payment method has been easy as well. There has not been any issues faced with the services of them so far.
    Was this review helpful? 0
    , coimbatore
    Reviewed on Jan 13, 2019
  • LIC Life Insurance
    "Good for me and for my nominees"
    0.5 4.0/5 "Great!"
    I have purchased Jeevan anand policy with LIC, my policy has the tenure period of 20 years. As per my policy I need to pay the premium for 15 years, I make Rs. 30,000 per annuam. At last I get the premium cover upto Rs. 20 lakhs and one other good benefits even after the policy expiry there is a maturity benefits of 14 lakhs will provide to the nominees for certain demise its good. But I suggest they need more improvement on the customer support,
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 11, 2019
  • LIC Life Insurance
    "Trusted Insurance Company"
    0.5 4.0/5 "Great!"
    It was taken the policy with LIC in month of 2014, they have good reputation and my relative is working as an agent. To secure my family I took this policy, the policy which I am holding it for 25 years, I will be getting the maturity after the tenure period.
    Was this review helpful? 0
    , kolkata
    Reviewed on Jan 11, 2019
  • LIC Life Insurance
    "Good Investment"
    0.5 5.0/5 "Blown Away!"
    Agents are professional in LIC, and they have flexi in the payment options. I have Jeevan anand policy it has the term period of 15 years, I need to pay the premium for whole year after 24 years I get the return value also they provide life coverage.
    Was this review helpful? 0
    , dandeli
    Reviewed on Jan 10, 2019
  • LIC Life Insurance
    "Good Policy to take"
    0.5 4.0/5 "Great!"
    LIC is providing lots of tax benefits policy hence i have chosen the policy with them. I have taken the Jeevan Anand policy. I used to make the premium amount through online. I'm very much satisfied with the sum assured amount. Total tenure period of the policy is 15 years.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Jan 10, 2019
  • LIC Life Insurance
    "Good Policy"
    0.5 3.0/5 "Satisfactory"
    I have money back policy policy with LIC, it has premium of Rs. 10,000 per annum. It gives the maturity benefits after 20 years of the tenure period, I used to get the bonus amount around Rs. 40,000 for every five years it has the tax benefits too.
    Was this review helpful? 1
    , malda
    Reviewed on Jan 10, 2019
  • LIC Life Insurance
    "Good service"
    0.5 4.0/5 "Great!"
    It has been a good policy and i had started this insurance a long time back. The premium amount has not been not too high and i have been paying it annually where the payment method has not been high. The policy is good and can be suggested to others.
    Was this review helpful? 0
    , pune
    Reviewed on Jan 09, 2019
  • LIC Life Insurance
    "Average Policy"
    0.5 4.0/5 "Great!"
    Purchased my life insurance policy with Life Insurance Corporation of India. I have selected the LIC because of the wife's suggestion. I have chosen the Jeevan Bhima policy. I am paying the premium amount of Rs. 30000 every year. I have no idea about the coverage value. I make the premium through agent via money transfer.
    Was this review helpful? 1
    , new delhi
    Reviewed on Jan 09, 2019
  • LIC Life Insurance
    "Better to invest"
    0.5 5.0/5 "Blown Away!"
    I have a money back policy from LIC which was taken before 10 years through an agent. Every 4 years once they are providing good benefits like bonus points. The agent was very helpful. I got the insurance paper. I am paying the premium every quarterly 1000 rupees through online.
    Was this review helpful? 1
    , pondicherry
    Reviewed on Jan 09, 2019
  • LIC Life Insurance
    "Benefits part should be increased"
    0.5 2.0/5 "Expected more"
    I have term insurance with LIC, they give the life coverage to the nominees, they have option to add multiple nominees. I have taken it for 20 lakhs hence I need to pay the premium around Rs. 7000 per annum, the draw back with this policy they wont provide paritial amount to the holder.
    Was this review helpful? 0
    , thrissur
    Reviewed on Jan 09, 2019
  • LIC Life Insurance
    "Good Bonus Policy"
    0.5 4.0/5 "Great!"
    LIC is national insurance company and it has the good reputation. I have taken the policy called money back policy, it has maturity period around 15 to 20 years, I used to get bonus amount every 3 years or 5 years, they have tax benefits and other facilities.
    Was this review helpful? 1
    , thrissur
    Reviewed on Jan 09, 2019
  • ICICI Prudential Life Insurance
    "Average Policy"
    0.5 3.0/5 "Satisfactory"
    My life insurance was bought from ICICI prudentuial. One of my friend who is working over there has recommended me about this policy. I paid the premium amount of Rs. 25000 annually. I have paid the premium for 2 years after that i have discontinued the policy due to the personal reasons. I have to pay the premium for 7 years actually.
    Was this review helpful? 1
    , tiruchirapalli
    Reviewed on Jan 09, 2019
  • LIC Life Insurance
    "Its Good"
    0.5 4.0/5 "Great!"
    I have taken some policy with LIC, I could not recall the name of the life insurance. But it has the term of 15 years, I need to pay only for 10 years, I get the coverage for whole year. They are providing tax benefits with the life insurance premium and it has life coverage.
    Was this review helpful? 1
    , bangalore
    Reviewed on Jan 09, 2019
  • LIC Life Insurance
    "Not satisfied"
    0.5 2.0/5 "Expected more"
    I have my life insured with LIC from last 15 years and it is a long term policy. I pay my premium once on 6 months through direct payment and i am convenient with the payment options. I am not happy with the returns and tenure period for this policy is for 25 years.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 09, 2019
  • LIC Life Insurance
    "Trusted Insurance"
    0.5 5.0/5 "Blown Away!"
    They saving our money and providing the loan based on the premium but we need to maintain proper track record for the LIC. I have taken the policy for the tenure of 25 years, I need to pay the premium for whole year I expect good value from my three policy.
    Was this review helpful? 0
    , cuddalore
    Reviewed on Jan 09, 2019
  • LIC Life Insurance
    "Life Saving Policy"
    0.5 5.0/5 "Blown Away!"
    My life was insured with Life Insurance Corporation of India. I have purchase a plan called Jeevan Bhima Yojana. Since my father is paying the premium, I'm not sure about the amount. This is a 20 years tenure period policy. I never had any trouble with this policy.
    Was this review helpful? 1
    , chandigarh
    Reviewed on Jan 08, 2019
  • LIC Life Insurance
    "Good service"
    0.5 5.0/5 "Blown Away!"
    I have been holding my life insurance with Life Insurance corporation of India,i took this insurance long bank , the agent had explain me clearly about the policy coverage and plan benefit,and i pay premium on quarterly basis, i pay up to 2700-2800 rupees which was nominal for me,it use to get auto debited from my account.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 08, 2019
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