How else does life insurance help?
♫ July 18th, 2011 2:41 amThe 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. Plans like the Kotak Endowment Plan, Kotak Money back Plan, Kotak Child Advantage Plan, Kotak Preferred Retirement Plans, etc 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 dependants in case of premature death. For your medical needs and that of your family
Hospitalization costs and quality healthcare is becoming increasingly expensive. Without insurance, you can actually face a situation where you have withdrawn all your money and borrowed to pay the medical bills. This can be provided with our Critical Illness Benefit. Insurance provides you the option of covering yourself towards any critical illnesses that can become extremely costly. Choosing this facility pays you a lump sum upon diagnosis of certain diseases like cancer, kidney failure, heart attack, stroke, coronary bypass, vital organ transplants, Alzheimer’s disease, paralysis, etc.
