How else does life insurance help?

The primary need is buying financial security for your family. Other aspects that insurance helps fulfill are:

Tax benefits

The Tax exemption available under our insurance and pension policies are described below:

  • Under Sec.80C of the Income Tax Act
    Premiums paid upto maximum of Rs.1,00,000/-, subject to maximum of 20% of Sum Assured ,to effect or keep in force an insurance on the life of the individual, the spouse and any child of the individual.
  • Under Sec.80CCC of the Income Tax Act
    Premiums paid upto maximum of Rs. 1,00,000/- to effect or keep in force a contract of annuity plan for receiving pension.
    (However, u/s.80 CCE, the aggregate amount of deduction under section 80C, section 80CCC, and section 80CCD shall not, in any case exceed Rs. 1 lakh)
  • Under Sec.80 D of the Income Tax Act
    Premiums paid (other than through cash) towards Critical Illness Rider, subject to a total maximum of Rs.15,000/- (an additional Rs 5,000 for senior citizens) to effect or keep in force an insurance on the health of the individual, spouse and dependent parents or children.
  • Maturity Benefits are exempted Under Sec.10(10D) of the Income Tax Act.
    Maturity benefits are tax free. However in cases where premium exceeds 20% of Sum assured in any year, benefits paid in excess of premiums paid will be taxable.

As a tool of financial planning

Most insurance plans available today have a built in savings element. They allow you to meet your dual financial goals of life cover and Savings for the future. Collateral security for loans

You may avail of a loan from the insurance company against certain plans. Your policy could also be pledged as a collateral to raise funds from banks and other financial institutions. In case of your unfortunate death the loans may be repaid from the proceeds of the life insurance policy. Savings

Insurance promotes compulsory savings with regular premium payments and helps build up a corpus of funds along with financial security for the dependents in case of premature death. For your medical needs and that of your family.