Do you want to thoroughly understand in detail about term insurance tax benefit? If yes, then take a look at this guide and read further to collect the essential details about term insurance tax benefit.

If you want to protect the financial future of your family and save taxes, then sure you can go with the term insurance plan. Using this term insurance plan, sure you can able to grab extraordinary benefits. Before applying for this plan, you must know the tax benefits available in this term insurance plan.

Term Insurance Tax Benefit

In general, most of the people discuss about the tax planning at the end of the every financial years. There are many interesting ways available for people to make better strategic investments to increase their savings and reduce their taxes. Hence they are using such ways to make the investments very strategically.

The deductions comes under the Income Tax Act, 1961 is also very much helpful for people to make proper tax planning. During that time, many people want to go with the term insurance plan since it can offer many exclusive advantages.

A term insurance plan can be helpful for people to claim deductions under the Section 80C & 80D of the income tax act. With that, you can sure experience the most extraordinary tax benefits.

About term insurance

A term insurance plan let policyholders to easily get the life cover without less documentation. Before applying for this plan, people must know that this plan won’t offer them the investment or maturity benefits, since it is completely a protection policy.

The term insurance plan is also very much affordable. Therefore those who want to apply for life cover insurance plan at pocket-friendly rates can choose the term insurance.

If the policyholder becomes no more during the active policy, their beneficiary can get the complete death benefit payout. It is best chance for the policyholder to safeguard their family members and protect their financial stability when they left this world. The beneficiary can use this amount in future for any instances. They can also use the money to replace their lost income/pay off debts.

According to their preference, nominee(s) can get the death benefit extension in the form of the lump sum/installments. Along with that, the term insurance plan can also let policyholder to get better peace of mind in the long term.

Term insurance tax benefit under Section 80C

With the help of term insurance tax benefit under section 80C of the Income Tax Act, 1961, sure you can increase your tax savings. You can also get more possibilities to claim deductions for around INR 1,50,000 per year. The amount will be fixed according to the premiums that you pay to maintain your life insurance policy. But you must remember that, to claim this deduction, your premium must be less than 10% of the assured sum amount.

Term insurance tax benefit under Section 10(10D)

Through the term insurance tax benefit section 10(10D) of the Income Tax Act, 1961, you can experience some more term insurance tax benefits that 80C can’t. There won’t be any additional tax deductions will be there on the final payment made to the beneficiaries when the policyholder is death. It is exempt from the tax and hence it provides additional benefits for the beneficiaries to be financially stable in the future.

What is Section 80D of the Income Tax Act?

The Section 80D of the Income Tax Act mainly deals with the health insurance policies. Still, there are many possibilities to enjoy these section 80D benefits against the term plan.

At present, most of the term policies provide additional health cover and hence that can be very much helpful for the policyholder. They can buy the critical illness rider along with the term plan to enjoy much more benefits.
Now you can easily claim deductions under the Section 80D of the Income Tax Act as the critical illness is the part of the health category. Check out the guide further and find what all the deductions available for the term insurance policies under the Section 80D of the Income Tax Act.

Here, let us consider that you are paying the premiums for 3 term insurance plans. Those three plans are for your family such as husband, wife and child. These family members are aged below 60 and must have the health riders on the policy. Totally, now you can claim the deduction of around INR 25,000 for all the premiums for 3 term insurance plans.

Then, it is possible for you to claim the deduction from the rest of the premiums that comes under the Section 80C of the Income Tax Act.

You can also pay the premium for the terms insurance plans for your parents as the responsible child. Here, let us consider that, you have got some separate insurance policies for your parents aged above 60. Now these term insurance policies can also have the insurance riders too. Now it is possible for you to claim some more deduction of around INR 50,000 under Section 80D. totally, you can grab the term insurance tax benefit 80d for around INR 75,000 per year.

Possibilities to claim tax benefit under Section 80D

As the Section 80D deals only with the health insurance, you must stay aware to claim tax deductions for the term insurance policy. Therefore it is best to thoroughly go through the details of the term insurance plan.

You must check out where there is any health rider that you want to add to the policy. For instance, a critical illness rider can increase your eligibility to claim the tax benefits under the Section 80D of the Income Tax Act.

If you don’t have any idea about the tax deductions, then you can discuss with the insurance service provider about what qualifies as the health rider. A highly skilled financial expert can easily gives you better ideas about the tax benefits and understand much better.

While filing the taxes, you must enter the accurate details. Hence, ensure it properly with through check out after entering the details. It can let you avoid from doing mistakes and risk losing the term insurance tax benefits.

You can get many benefits along with the life cover after applying this term insurance policy. You can get health riders & the chance to formulate the better tax plan. Hence make the smart investment choice to protect the financial future of your family by saving the money today.

Term insurance riders tax benefits

Policyholders can grab more tax benefits through riders or add-ons & above the term insurance plan to strengthen the term insurance policy. During that time, the insurer need to pay the total or part of the sum insured according to the certain illness specified by the insurance service provider.

Tax benefit under Section 80D eligibility criteria

If you want to grab the tax benefits under Section 80D, you must meet some eligibility criteria. Hindu Undivided Family (HUF) or Individuals can claim the deductions for any health checkup for self, their children, parents or children.

Eligible payments for deduction under Section 80D

You must note that, Rs 25,000 is the deduction that comes under the Section 80D of the Income Tax Act in the financial year. It is up to Rs 50,000 for the senior citizens. Check out below to know the eligible payments for HUF or individuals

• HUF or individuals can claim the deduction of around Rs 25,000 based on the premium paid to their insurance policy for self, children, parents and spouse.
• In the case of parents aged above 60, there are some additional deductions of around Rs 50,000.
• If the family members aged above 60 or have any medical cover, they can get the deduction of Rs 1,00,000.
• If medical expenses are incurred towards the senior citizen and don’t cover under the health insurance, the deduction will be of Rs 50,000.
• Hindu Undivided Families can also claim the deduction under this section for premium based on the health insurance policies applied for their family members. Here the deduction will be of Rs 25,000 when the insured members are aged below 60 and Rs 50,000 when the insured members are aged above 60.

What are the exclusions for tax benefits under Section 80D?

Take a look at below and know all the exclusions for tax benefits under Section 80D of the Income Tax Act in the financial year

• Those who don’t pay premiums regularly, then sure they won’t get any tax benefits.
• The tax benefits under this section will not be application when the employers pay the premium towards the group health insurance.
• It will also never apply to the premium that paid on the behalf of employed or working children or other relatives.
• At last, it will never hold any value when payment is made for premiums in cash.

From the above scenario, now you have thoroughly understood in detail about term insurance tax benefit India. Apply for the term insurance plan today and experience these insurance benefits without fail.