There is a wide range of financial instruments in the market designed to serve various short-term and long-term goals for the average investor. They come in a variety of budget and risk requirements and each appeals to investors of different backgrounds. However, there is one investment option that always remains relevant and beneficial to investors of all kinds - term insurance.Whether you are an individual or the financial provider for a family, a reliable term insurance plan can provide your dependants with much-needed financial coverage in your absence.
However, there is another reason why term insurance should be considered an essential component of every investment portfolio. Apart from financial coverage and peace of mind, term insurance can also help you in considerably lowering your tax burden. Let us take a closer look at how you too can avail the various term plan tax benefits available to you:
Before delving into how term plan tax benefits can be availed, let us review what a term plan entails. A term insurance plan is essentially a form of life insurance that provides coverage to a policyholder for his or her desired time period, or ‘term’. Unlike traditional life insurance policies, the premiums for term plans are considerably more economical. They are also more accessible and offer far more flexibility to the policyholder.
With regards to term plan tax benefits, the Indian government and the Income Tax Department have laid out several provisions to avail deductions for your term insurance premium payments. These deductions, whether taken individually or altogether, considerably lower your taxable income and hence, help you save taxes for each year that your term plan continues. Whether you avail a term plan for yourself or for your loved ones, your premium payments will be eligible for the aforementioned tax deductions.
Now that we understand the basics of how term insurance can reduce your tax liabilities, let us delve into the specifics. To avail term plan tax benefits, here are some of the most popular tax deductions that can lower your taxable income:
With these deductions in place, policyholders with term insurance can greatly reduce their tax liabilities. These term plan tax benefits as well as the ease and accessibility of term insurance are the reasons why it is quickly becoming a popular product among insurance seekers.
If you too would like to avail a term insurance plan to safeguard the financial future of your family, consider availing the iSelect Star Term Plan from Canara HSBC Oriental Bank of Commerce Life Insurance. This term plan grants options for extensive coverage, various add-on covers and the opportunity to lower your tax burden with deductions up to Rs. 1.5 lakhs under Section 80C.