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Plan N Manage
LIFE INSURANCE
INCOME TAX ON INSURANCE PAYMENT
NO EXEMPTION IF ANNUAL PREMIUM EXCEEDS RS 2,50,000
Insurance payment received from an insurance company under a life insurance policy, including the sum allocated by way of bonus on such policy, is exempted from paying Income tax other than--
(a) any sum received under sub-section (3) of section 80DD or sub-section (3) of section 80DDA *; or
(b) any sum received under a Keyman insurance policy; or
(c) any sum received under an insurance policy issued on or after the 1st day of April, 2003 but on or before the 31st day of March, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds twenty per cent of the actual capital sum assured; or
(d) any sum received under an insurance policy issued on or after the 1st day of April, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds ten per cent of the actual capital sum assured:
Provided that the provisions of sub-clauses (c) and (d) shall not apply to any sum received on the death of a person:
Provided also that where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is--
(i) a person with disability or a person with severe disability as referred to in section 80U; or
(ii) suffering from disease or ailment as specified in the rules made under section 80DDB,
the provisions of this sub-clause shall have effect as if for the words "ten per cent", the words "fifteen per cent" had been substituted:
53[Provided also that nothing contained in this clause shall apply with respect to any unit linked insurance policy, issued on or after the 1st day of February, 2021, if the amount of premium payable for any of the previous year during the term of such policy exceeds two lakh and fifty thousand rupees:
Provided also that if the premium is payable, by a person, for more than one unit linked insurance policies, issued on or after the 1st day of February, 2021, the provisions of this clause shall apply only with respect to those unit linked insurance policies, where the aggregate amount of premium does not exceed the amount referred to in fourth proviso in any of the previous year during the term of any of those policies:
Provided also that the provisions of the fourth and fifth provisos shall not apply to any sum received on the death of a person:
Provided also that if any difficulty arises in giving effect to the provisions of this clause, the Board may, with the previous approval of the Central Government, issue guidelines for the purpose of removing the difficulty and every guideline issued by the Board under this proviso shall be laid before each House of Parliament, and shall be binding on the income-tax authorities and the assessee.]
FRESH Guidelines under clause (10D) section 10 of the Income-tax Act ISSUED ON 19.01.2022 :
As per the guidelines issued by income Tax Department on 19.01.2022 , payment received under a Unit Linked Insurance Policy (ULIP), issued on or after 01.02.2021, will not be exempted from paying income tax if the amount of premium payable for any of the
previous years during the term of such policy exceeds Rs 2,50,000. Further, if premium is payable for more than one ULIP, issued on or after 01.02.2021, the exemption under the said clause shall be available only with respect to such policies where the aggregate premium does not exceed Rs 2,50,000 for any of the previous years during the term of any of those policies. Howver exemption will be available on case of sum received on death of the person.
To read the guidelines , CLICK HERE
(a) any sum received under sub-section (3) of section 80DD or sub-section (3) of section 80DDA *; or
(b) any sum received under a Keyman insurance policy; or
(c) any sum received under an insurance policy issued on or after the 1st day of April, 2003 but on or before the 31st day of March, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds twenty per cent of the actual capital sum assured; or
(d) any sum received under an insurance policy issued on or after the 1st day of April, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds ten per cent of the actual capital sum assured:
Provided that the provisions of sub-clauses (c) and (d) shall not apply to any sum received on the death of a person:
Provided also that where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is--
(i) a person with disability or a person with severe disability as referred to in section 80U; or
(ii) suffering from disease or ailment as specified in the rules made under section 80DDB,
the provisions of this sub-clause shall have effect as if for the words "ten per cent", the words "fifteen per cent" had been substituted:
53[Provided also that nothing contained in this clause shall apply with respect to any unit linked insurance policy, issued on or after the 1st day of February, 2021, if the amount of premium payable for any of the previous year during the term of such policy exceeds two lakh and fifty thousand rupees:
Provided also that if the premium is payable, by a person, for more than one unit linked insurance policies, issued on or after the 1st day of February, 2021, the provisions of this clause shall apply only with respect to those unit linked insurance policies, where the aggregate amount of premium does not exceed the amount referred to in fourth proviso in any of the previous year during the term of any of those policies:
Provided also that the provisions of the fourth and fifth provisos shall not apply to any sum received on the death of a person:
Provided also that if any difficulty arises in giving effect to the provisions of this clause, the Board may, with the previous approval of the Central Government, issue guidelines for the purpose of removing the difficulty and every guideline issued by the Board under this proviso shall be laid before each House of Parliament, and shall be binding on the income-tax authorities and the assessee.]
FRESH Guidelines under clause (10D) section 10 of the Income-tax Act ISSUED ON 19.01.2022 :
As per the guidelines issued by income Tax Department on 19.01.2022 , payment received under a Unit Linked Insurance Policy (ULIP), issued on or after 01.02.2021, will not be exempted from paying income tax if the amount of premium payable for any of the
previous years during the term of such policy exceeds Rs 2,50,000. Further, if premium is payable for more than one ULIP, issued on or after 01.02.2021, the exemption under the said clause shall be available only with respect to such policies where the aggregate premium does not exceed Rs 2,50,000 for any of the previous years during the term of any of those policies. Howver exemption will be available on case of sum received on death of the person.
To read the guidelines , CLICK HERE
Tax Benefits for payment of Life Insurance Premium
Under 80 C of Income tax Act , life insurance premia paid on life indurance policies is one of the eligible instruments for total tax exemption up to Rs 1,50,000 only . However be cautious and confirm with policy issuers whether the contribution made to the particular policy is eligible for such exemption . The reason is there are riders for contributions made to be eligible for exemption .
As per Income tax law ,
quote ; "
Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section 80C. Payment of premium which is in excess of 10 per cent (if policy is issued on or after 1-4-2013, 15% in case of insurance on life of person with disability referred to in section 80U or suffering from disease or ailment specified in section 80DDB/rule 11DD) of actual capital sum assured shall not be included in gross qualifying amount. The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise, over and above the sum actually assured, which is to be or may be received under the policy by any person, shall not be taken into account for the purpose of calculating the actual capital sum assured.
The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account--
(i) the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.
4. Where, in any previous year, an assessee--
(i) terminates his contract of insurance, by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,--
(a) in case of any single premium policy, within two years after the date of commencement of insurance; or
(b) in any other case, before premiums have been paid for two years; or
(ii) terminates his participation in any unit-linked insurance plan (ULIP), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or
then,--
(a) no deduction shall be allowed to the assessee with reference to any of such sums, paid in such previous year; and
(b) the aggregate amount of the deductions of income so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.
For full page of Income tax website relevant to the above rule , CLICK HERE and go to section "Deductions Allowable to Tax Payer "
Hence premia paid one time premium policies may not be eligible to qualify for exemption as the insured amount may not be ten times the premium . Hence double check with insurance companies before purchasing as selling agents may not reveal you correctly .
As per Income tax law ,
quote ; "
Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section 80C. Payment of premium which is in excess of 10 per cent (if policy is issued on or after 1-4-2013, 15% in case of insurance on life of person with disability referred to in section 80U or suffering from disease or ailment specified in section 80DDB/rule 11DD) of actual capital sum assured shall not be included in gross qualifying amount. The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise, over and above the sum actually assured, which is to be or may be received under the policy by any person, shall not be taken into account for the purpose of calculating the actual capital sum assured.
The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account--
(i) the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.
4. Where, in any previous year, an assessee--
(i) terminates his contract of insurance, by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,--
(a) in case of any single premium policy, within two years after the date of commencement of insurance; or
(b) in any other case, before premiums have been paid for two years; or
(ii) terminates his participation in any unit-linked insurance plan (ULIP), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or
then,--
(a) no deduction shall be allowed to the assessee with reference to any of such sums, paid in such previous year; and
(b) the aggregate amount of the deductions of income so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.
For full page of Income tax website relevant to the above rule , CLICK HERE and go to section "Deductions Allowable to Tax Payer "
Hence premia paid one time premium policies may not be eligible to qualify for exemption as the insured amount may not be ten times the premium . Hence double check with insurance companies before purchasing as selling agents may not reveal you correctly .
IRDAI PERMITS OBTAINING PROPOSALS / ISSUE POLICIES ON-LINE :
Dated 09.08.2020 : In view of difficulties expressed by insurers in printing and forwarding Life policies to the insured , Insurance Regulatory & Development Authority of India ( IRDAI ) has now permitted to send / obtain completed insurance proposals ( applications ) on - line without requiring wet signature on the hard copy of the proposal form, for the business solicited by insurance agents / intermediaries .
IRDAI has already permitted on 05.08.2020 for issue of electronic policies by the life insurance companies and waived issue of regular printed policy documents for the FY 2020-21 .
CONDITIONS FOR OBTAINING PROPOSALS :
a. The completed proposal form shall be sent to the prospect on his/ her registered e-mail ID or mobile number in the form of an e-mail or a message with a link as the case may be.
b. The prospect, if he / she wishes to consent to the proposal, may do so by clicking the confirmation link or by validating the OTP shared. The Insurer shall maintain verifiable, legally valid evidence for the proposer’s consent received for the fully completed proposal form. Further, the insurer shall not accept any payment of moneys towards proposal deposit till the receipt of consent of the proposer.
c. In all such cases, the agent / intermediary shall confirm that only the approved sales material has been used during the solicitation process. They shall also certify the authenticity of the e-mail ID and/or mobile number of the prospect.
To read IRDAI Press Release dated 05.08.2020 , CLICK HERE
CONDITIONS FOR ISSUE OF ELECTRONIC POLICIES :
a) Life Insurer confirming the date of receipt of electronic policy document by the policyholder through PIVC or other means and preserving the proof so that Free Look period may be calculated from that date.
b) Thirty (30) days Free Look period may be allowed for all such electronic policy documents.
c) Return of electronic policy document by mail by policyholder with clear intention of cancellation of policy shall be valid for Free Look Cancellation.
d) Express consent of the policyholder to receive electronic policy bond is required. If a policyholder insists on hard copy, the same has to be issued without any charges.
e) Policy document shall be sent to the email id submitted by the proposer.
To read IRDAI Press Release dated 04.08.2020 , CLICK HERE
Dated 09.08.2020 : In view of difficulties expressed by insurers in printing and forwarding Life policies to the insured , Insurance Regulatory & Development Authority of India ( IRDAI ) has now permitted to send / obtain completed insurance proposals ( applications ) on - line without requiring wet signature on the hard copy of the proposal form, for the business solicited by insurance agents / intermediaries .
IRDAI has already permitted on 05.08.2020 for issue of electronic policies by the life insurance companies and waived issue of regular printed policy documents for the FY 2020-21 .
CONDITIONS FOR OBTAINING PROPOSALS :
a. The completed proposal form shall be sent to the prospect on his/ her registered e-mail ID or mobile number in the form of an e-mail or a message with a link as the case may be.
b. The prospect, if he / she wishes to consent to the proposal, may do so by clicking the confirmation link or by validating the OTP shared. The Insurer shall maintain verifiable, legally valid evidence for the proposer’s consent received for the fully completed proposal form. Further, the insurer shall not accept any payment of moneys towards proposal deposit till the receipt of consent of the proposer.
c. In all such cases, the agent / intermediary shall confirm that only the approved sales material has been used during the solicitation process. They shall also certify the authenticity of the e-mail ID and/or mobile number of the prospect.
To read IRDAI Press Release dated 05.08.2020 , CLICK HERE
CONDITIONS FOR ISSUE OF ELECTRONIC POLICIES :
a) Life Insurer confirming the date of receipt of electronic policy document by the policyholder through PIVC or other means and preserving the proof so that Free Look period may be calculated from that date.
b) Thirty (30) days Free Look period may be allowed for all such electronic policy documents.
c) Return of electronic policy document by mail by policyholder with clear intention of cancellation of policy shall be valid for Free Look Cancellation.
d) Express consent of the policyholder to receive electronic policy bond is required. If a policyholder insists on hard copy, the same has to be issued without any charges.
e) Policy document shall be sent to the email id submitted by the proposer.
To read IRDAI Press Release dated 04.08.2020 , CLICK HERE
IRDAI EXTENDS ADDITIONAL GRACE PERIOD FOR INSURANCE RENEWAL
Dated 11.05.2020 : In view of National lock-down extended up to 17th, May by the Government of India , Insurance Regulatory & Development Authority of India ( IRDAI ) has extended the additional grace period given to pay renewal premium of Life insurance policies due in March 2020 and now such premiums can be paid up to 31st, May 2020 to keep the policy coverage in force .
To read IRDAI Press Release dated 09.05.2020 , CLICK HERE
Dated 11.05.2020 : In view of National lock-down extended up to 17th, May by the Government of India , Insurance Regulatory & Development Authority of India ( IRDAI ) has extended the additional grace period given to pay renewal premium of Life insurance policies due in March 2020 and now such premiums can be paid up to 31st, May 2020 to keep the policy coverage in force .
To read IRDAI Press Release dated 09.05.2020 , CLICK HERE
IRDAI ALLOWS 30 DAYS ADDITIONAL GRACE FOR INSURANCE RENEWAL
Dated 27.03.2020 : In view of lock-down in the wake of spread of pendemic COVID-19 , Insurance Regulatory & Development Authority of India ( IRDAI ) has permitted following relaxations for payment of insurance renewal :
1. In case of Life Insurance policies , insurers are asked to enhance existing grace period of 30 days by another 30 days .
2. In case of Health policies , the insurance companies may condone delay in renewal up to 30 days without deeming it as brake in the policy .
To read IRDAI Press Release dated 23.03.2020 , CLICK HERE
Dated 27.03.2020 : In view of lock-down in the wake of spread of pendemic COVID-19 , Insurance Regulatory & Development Authority of India ( IRDAI ) has permitted following relaxations for payment of insurance renewal :
1. In case of Life Insurance policies , insurers are asked to enhance existing grace period of 30 days by another 30 days .
2. In case of Health policies , the insurance companies may condone delay in renewal up to 30 days without deeming it as brake in the policy .
To read IRDAI Press Release dated 23.03.2020 , CLICK HERE
Editor' Note : Premia paid on Life Insurance policies , among other instruments , are eligible for income tax exemption up to Rs 1,50,000/- under Section 80C of Income tax act . However all policies are not eligible for the exemption as they are Riders in the income tax act . Especially Single premium policies may not be eligible as Insurance risk cover may not be 10 times the premium paid . Some times benefits mentioned in the policies may be vague with regard to the eligibility . Hence check with insurance companies / chartered accountants regarding suitability for tax exemptions . Customers Beware as selling agents may not reveal correct position in their eagerness to sell policies .
For detailed clauses of Income tax , Go below to the section " Tax Benefit "
For detailed clauses of Income tax , Go below to the section " Tax Benefit "
BASICS OF LIFE INSURANCE
TYPES OF LIFE INSURANCE POLICIES
Term Insurance
Policy holder / nominees will get benefits by the Insurance company in case of death or disability if covered only during the period of policy . No benefit will be payable after the maturity .
Whole Life Insurance:
Whole life insurance pays out a death benefit to the nominee / legal heirs on the death of the policy holder .
Endowment Policy
An Endowment Policy is a savings linked insurance policy with a specific maturity date. Should an unfortunate event by way of death or disability occur to the policy holder during the period, the Sum Assured will be paid to the beneficiaries. In case policy holder survives the period , benefits will be paid to him / her .
Money back plans or cash back plans:
Under this plan, certain percent of the sum assured is returned to the insured person periodically as survival benefit. On the expiry of the term, the balance amount is paid as maturity value. The life risk may be covered for the full sum assured during the term of the policy irrespective of the survival benefits paid.
Children Policies:
These types of policies are taken on the life of the parent/children for the benefit of the child. By such policy the parent can plan to get funds when the child attains various stages in life.
Pension Plans:
To cover oneself for his old age when capacity to work and earn would have diminished and earning itself would have come down , pension plans are offered by the insurance companies . It is wise to provide for old age, when we have regular income during our earning period to take care of retired days. Financial independence during old age is a must for everybody.
Policy holder / nominees will get benefits by the Insurance company in case of death or disability if covered only during the period of policy . No benefit will be payable after the maturity .
Whole Life Insurance:
Whole life insurance pays out a death benefit to the nominee / legal heirs on the death of the policy holder .
Endowment Policy
An Endowment Policy is a savings linked insurance policy with a specific maturity date. Should an unfortunate event by way of death or disability occur to the policy holder during the period, the Sum Assured will be paid to the beneficiaries. In case policy holder survives the period , benefits will be paid to him / her .
Money back plans or cash back plans:
Under this plan, certain percent of the sum assured is returned to the insured person periodically as survival benefit. On the expiry of the term, the balance amount is paid as maturity value. The life risk may be covered for the full sum assured during the term of the policy irrespective of the survival benefits paid.
Children Policies:
These types of policies are taken on the life of the parent/children for the benefit of the child. By such policy the parent can plan to get funds when the child attains various stages in life.
Pension Plans:
To cover oneself for his old age when capacity to work and earn would have diminished and earning itself would have come down , pension plans are offered by the insurance companies . It is wise to provide for old age, when we have regular income during our earning period to take care of retired days. Financial independence during old age is a must for everybody.
There are two types of pension plans:
Unit Linked Insurance Policies (ULIPs) offer choice of the way premiums are invested . As insured has a choice , he will also take risk of investment . Typically, the policy will provide with a choice of funds in which policyholder may invest. One has the flexibility to switch between different funds during the life of the policy.The value of a ULIP is linked to the prevailing value of units one has invested in the fund, which in turn depends on the fund's performance. In the event of death or permanent disability, the policy will provide the Sum Assured (to the extent you are covered) . A ULIP has varying degrees of risk and rewards. There are various charges applicable for Unit Linked Policies and the balance amount out of the premium is only invested in the fund/funds chosen by policyholder. It is important to ask insurer or agent or broker questions to understand the sum total of charges that one has to incur. It is important to assess risk appetite and investment horizon before deciding to buy a ULIP policy. One must also read the terms and conditions of the policy carefully to understand the features of the policy including the lock-in period, surrender value, surrender charges etc.
- Immediate Annuity
In case of immediate Annuity, the pension payment from the Insurance Company starts immediately. Premium for immediate Annuity is to be paid in Iumpsum in one installment only. - Deferred Annuity
Under deferred Annuity policy, the person pays regular contributions to the Insurance Company, till the vesting age/vesting date. He has the option to pay as single premium also. The fund will accumulate with interest and fund will be available on the vesting date. The insurance company will take care of the investment of funds and the policyholder has the option to encash 1/3rd of this corpus fund on the vesting age / vesting date tax free. The balance amount of 2/3rd of the fund will be utilized for purchase of Annuity (pension) to the Annuitant.
Unit Linked Insurance Policies (ULIPs) offer choice of the way premiums are invested . As insured has a choice , he will also take risk of investment . Typically, the policy will provide with a choice of funds in which policyholder may invest. One has the flexibility to switch between different funds during the life of the policy.The value of a ULIP is linked to the prevailing value of units one has invested in the fund, which in turn depends on the fund's performance. In the event of death or permanent disability, the policy will provide the Sum Assured (to the extent you are covered) . A ULIP has varying degrees of risk and rewards. There are various charges applicable for Unit Linked Policies and the balance amount out of the premium is only invested in the fund/funds chosen by policyholder. It is important to ask insurer or agent or broker questions to understand the sum total of charges that one has to incur. It is important to assess risk appetite and investment horizon before deciding to buy a ULIP policy. One must also read the terms and conditions of the policy carefully to understand the features of the policy including the lock-in period, surrender value, surrender charges etc.
TIPS FOR BUYING LIFE INSURANCE
1. Understand the risks and rewards of various types of policies available . For example , return on ULIP policies depends on market conditions . Term policies offer maturity benefits till a specific period mentioned in the policy . Whole life policies get benefits only to your surviving members and you may not be able to utilize benefits your life period in case of need . The return on endowment policies may be lesser than other investment options . . Hence take time to study and go for a mix of policies to suit your various needs .
2. The life insurance policies cover triple purpose of risk coverage , investment and tax planning . All policies will not do all the functions . Hence suitable mixing of products is essential and you need different types of policies .
3. Calculate the actual amount of insurance you need . There are web sites available for this purpose . Some of the insurance company websites also have this facility . You may not be able to afford premium for the amount required immediately . You can increase over the period till your cover your entire requirement .
4. Insurance policies as investment tool is not an ideal option . Insurance policies are basically to cover risk of death or disability . You can have other options like deposit , mutual funds etc which yield higher returns .
5. Insurance agents can guide to get proper coverage of your risks . But be aware they have vested interest in selling insurance policies and an unscrupulous agent may try to sell a policy where he would get maximum commission instead showing you a right path .
6. Beware of various charges , hidden or otherwise, of ULIP Policies .
7. There are websites available where you can get comparison charts of various policies which can utilize .
8. You calculate how much of premium you have to pay every month . Think whether you can afford to pay continuously till maturity ? . If not try to reduce the premium by changing type of policies from endowment to whole life etc . the primary focus of L I policies should be risk coverage .
9. Tax benefits are available to premium paid under 80C of Income tax ( For Details , CLICK HERE ) . Try for maximum utilization of the benefits by mixing risk coverage and investment .
10. 10 finally LI policies are long time contracts . It is essential that Insurance companies you are trusting must have financial capacity to serve for long time . Hence even if premia is less or benefits are more in any single company , go for diversifying through few companies you can trust . Life insurance corporation of India is one of such companies which is under public sector and has reputation of serving for a long time .
2. The life insurance policies cover triple purpose of risk coverage , investment and tax planning . All policies will not do all the functions . Hence suitable mixing of products is essential and you need different types of policies .
3. Calculate the actual amount of insurance you need . There are web sites available for this purpose . Some of the insurance company websites also have this facility . You may not be able to afford premium for the amount required immediately . You can increase over the period till your cover your entire requirement .
4. Insurance policies as investment tool is not an ideal option . Insurance policies are basically to cover risk of death or disability . You can have other options like deposit , mutual funds etc which yield higher returns .
5. Insurance agents can guide to get proper coverage of your risks . But be aware they have vested interest in selling insurance policies and an unscrupulous agent may try to sell a policy where he would get maximum commission instead showing you a right path .
6. Beware of various charges , hidden or otherwise, of ULIP Policies .
7. There are websites available where you can get comparison charts of various policies which can utilize .
8. You calculate how much of premium you have to pay every month . Think whether you can afford to pay continuously till maturity ? . If not try to reduce the premium by changing type of policies from endowment to whole life etc . the primary focus of L I policies should be risk coverage .
9. Tax benefits are available to premium paid under 80C of Income tax ( For Details , CLICK HERE ) . Try for maximum utilization of the benefits by mixing risk coverage and investment .
10. 10 finally LI policies are long time contracts . It is essential that Insurance companies you are trusting must have financial capacity to serve for long time . Hence even if premia is less or benefits are more in any single company , go for diversifying through few companies you can trust . Life insurance corporation of India is one of such companies which is under public sector and has reputation of serving for a long time .
All insurance companies are regulated by Insurance Regulatory and Development Authority of India ( Website https://www.irda.gov.in/ ) . In case you have any complaint , approach Insurer’s grievance redressal mechanism as spelt out in the insurance policy document . ( To get the list of emails of various life insurers’ grievance redressal officers , click here )
In case your grievance is not resolved within 15 days , you can approach IRDA at their Integrated Grievance Redressal mechanism ( IGMS ) ( http://www.igms.irda.gov.in/ )
In case your grievance is not resolved within 15 days , you can approach IRDA at their Integrated Grievance Redressal mechanism ( IGMS ) ( http://www.igms.irda.gov.in/ )
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