Know About Your Life Insurance

What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.

  • The contract is valid for payment of the insured amount during:
    » The date of maturity, or
    » Specified dates at periodic intervals, or
    » Unfortunate death, if it occurs earlier.
  • Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
  • Contribution to Pension/Annuity Plans - Jeevan Akshay - VI

2) Deduction under section 80D

  • Deduction allowable upto Rs.15,000/- if an amount is paid to keep in force an insurance on health of assessee or his family (i.e. Spouse & children)
  • Additional deduction upto Rs.15,000/- if an amount is paid to keep in force an insurance on health of parents. In case of HUF, deduction allowable upto Rs.15,000/- if an amount is paid to keep in force an insurance on health of any member of that HUF
    Note: If the sum specified in (a) or (b) or (c) is paid to effect or keep in force an insurance on the health of any person specified therein who is a senior citizen, then the deduction available will be upto Rs.20,000/-. provided that such insurance is in accordance with the scheme framed by
    a) the General Insurance Corporation of India as approved by the Central Government in this behalf or;
    b) Any other insurer and approved by the Insurance Regulatory and Development Authority.

Premiums paid towards most traditional LIC plans are eligible for Tax rebate under Section 80C each year upto Rs.1,50,000. The Maturity/ Death claim paid under Jeevan Anand is 100% Tax-free under Section 10(10d)