Tax
Life Insurance
2024-05-14 5 Min read
0
While everyone wishes to be free from financial worries, securing the future of your loved ones is probably one of the top goals most of us have. It is essential to put your savings to work and invest in the right financial products, but along with this, you need to plan for life’s unforeseen twists and turns. Ensuring that your family will be able to sustain a comfortable livelihood, even in your absence, is something that you need to consider. This is where a life insurance policy comes into play.
If you are looking for an affordable way to protect your family from life’s uncertainties, then a term insurance plan is indeed the best option. Read on to understand how a standard term insurance plan offers numerous benefits under one policy.
Term Insurance: Budget-Friendly Security
When it comes to life insurance, term insurance plans are said to be the most pocket-friendly. Since the focus is on life cover and not on the cash value, the premium charged is affordable. SUD Saral Jeevan Bima is an ideal plan for anyone planning to invest in a pure life cover. Here are some of the striking features and benefits of a term insurance plan:
1.High coverage at a low price
A term plan is usually a pure life protection plan. Such a straightforward life insurance plan ensures the life assured is covered against uncertainties of life so the family left behind does not have to go through any financial crisis. Since it is a pure life cover with no investment component, the premium charged is low. Individuals seeking a pure and affordable life cover can look forward to Saral Jeevan Bima offered by SUD.
2.Term plans are flexible
In order to help individuals meet their specific needs and preferences, term plans are designed flexibly. Individuals enjoy flexibility in terms of policy tenure, premium payment frequency, policy coverage, and so on. These are the features that make Saral Jeevan Bima a versatile option for various individuals.
3.There are no management charges
Management charges are usually levied when the insurance company has to manage the investment components of an insurance plan. With a term insurance plan, there are usually no management charges since it is a pure protection plan. With Saral Jeevan Bima, you do not have to pay any management charges since there are no investment components.
4.Income tax benefits
Another added perk of a term insurance plan is the income tax benefit. You are eligible to avail of income tax deductions for the premium paid against the term insurance plan. This way, you enjoy dual benefits; a life insurance cover for future financial security and income tax benefits for current benefits.
1.High coverage at a low price
A term plan is usually a pure life protection plan. Such a straightforward life insurance plan ensures the life assured is covered against uncertainties of life so the family left behind does not have to go through any financial crisis. Since it is a pure life cover with no investment component, the premium charged is low. Individuals seeking a pure and affordable life cover can look forward to Saral Jeevan Bima offered by SUD.
2.Term plans are flexible
In order to help individuals meet their specific needs and preferences, term plans are designed flexibly. Individuals enjoy flexibility in terms of policy tenure, premium payment frequency, policy coverage, and so on. These are the features that make Saral Jeevan Bima a versatile option for various individuals.
3.There are no management charges
Management charges are usually levied when the insurance company has to manage the investment components of an insurance plan. With a term insurance plan, there are usually no management charges since it is a pure protection plan. With Saral Jeevan Bima, you do not have to pay any management charges since there are no investment components.
4.Income tax benefits
Another added perk of a term insurance plan is the income tax benefit. You are eligible to avail of income tax deductions for the premium paid against the term insurance plan. This way, you enjoy dual benefits; a life insurance cover for future financial security and income tax benefits for current benefits.
Tax Efficiency in Term Insurance
If you think that a term plan is an instrument that helps only your loved ones, you will be pleasantly surprised that it does more than that. Along with the peace of mind that a term plan offers, you can also enjoy tax benefits. A term insurance policy, thus, serves the dual purpose of protecting the financial future of your loved ones and tax exemptions. Let’s see how:
1.Income Tax Act of 1961: Section 80C
As per Section 80C, you are eligible for tax deductions of up to ₹1.5 lakhs. Both individuals and HUfs (Hindu Undivided Families) are eligible for this tax benefit.
To claim Section 80C tax benefits for premiums paid against life insurance cover, there are certain conditions as stated below:
● The premium paid should not be above 10% of the sum assured (guaranteed under the term plan). It is applicable for all the term plans purchased after 1st April 2012
● If you have a policy purchased before 1st April 2012, the premium limit is 20% of the sum assured
● For life assured with disabilities as stated u/S 80U or any disease stated under 80DDB, the premium limit to claim income tax benefits of Section 80C is 15% of the sum assured.
2.Income Tax Act of 1961: Exemption u/S 10(10D)
u/S 10(10D) the death benefit of a term insurance plan is completely tax-free in the hands of the nominee.
1.Income Tax Act of 1961: Section 80C
As per Section 80C, you are eligible for tax deductions of up to ₹1.5 lakhs. Both individuals and HUfs (Hindu Undivided Families) are eligible for this tax benefit.
To claim Section 80C tax benefits for premiums paid against life insurance cover, there are certain conditions as stated below:
● The premium paid should not be above 10% of the sum assured (guaranteed under the term plan). It is applicable for all the term plans purchased after 1st April 2012
● If you have a policy purchased before 1st April 2012, the premium limit is 20% of the sum assured
● For life assured with disabilities as stated u/S 80U or any disease stated under 80DDB, the premium limit to claim income tax benefits of Section 80C is 15% of the sum assured.
2.Income Tax Act of 1961: Exemption u/S 10(10D)
u/S 10(10D) the death benefit of a term insurance plan is completely tax-free in the hands of the nominee.
About SUD Saral Jeevan Bima
Saral Jeevan Bima is a standardized life insurance plan initiated by the Government of India. It is a non-linked, non-participating and individual pure life insurance plan. This means there are no investment components or maturity benefits in this plan, but it is rather a simple and pure life cover. During the policy tenure, if the life assured dies, the nominee/family receives the death benefit.
To accelerate the penetration of the maximum number of people in India into life insurance, IRDAI launched this initiative. The life cover ranges from ₹5 lakhs to ₹25 lakhs for a policy term ranging from 5 years to up to 40 years. Anyone between the ages of 18 and 65 can apply for Saral Jeevan Bima. Individuals have the flexibility to decide their policy tenure, premium payment frequency, and the sum assured amount. This standardized life insurance is not only a simple plan but also aims to increase the transparency of policy terms for better clarity.
To accelerate the penetration of the maximum number of people in India into life insurance, IRDAI launched this initiative. The life cover ranges from ₹5 lakhs to ₹25 lakhs for a policy term ranging from 5 years to up to 40 years. Anyone between the ages of 18 and 65 can apply for Saral Jeevan Bima. Individuals have the flexibility to decide their policy tenure, premium payment frequency, and the sum assured amount. This standardized life insurance is not only a simple plan but also aims to increase the transparency of policy terms for better clarity.
Conclusion
Saral Jeevan Bima is a simple life insurance solution to the needs of a broader audience in India. Through Saral Jeevan Bima, insurance sectors can now offer affordable and pure-term plans. For individuals seeking simplicity and ease in their life insurance options, Saral Jeevan Bima emerges as a fitting solution. Addressing the need for basic life coverage and affordable premiums is a commendable initiative by IRDAI. If you are also looking to invest in a pure-term plan, you may choose to begin with Saral Jeevan Bima.
Reference
Disclaimer
Star Union Dai-ichi Life Insurance Company Limited is the name of the Insurance Company and “SUD Life Protect Shield Plus” is the name of the plan. Neither the name of the Insurance Company nor the name of the plan in anyway indicates the quality of the plan, its future prospects or returns.
SUD Life Saral Jeevan Bima | UIN: 142N088V01 | A Non-Linked Non-Participating Pure Risk Premium Individual Life Insurance Plan Star Union Dai-ichi Life Insurance Company Limited |IRDAI Regn. No: 142 | CIN: U66010MH2007PLC174472
Registered Office: 11th Floor, Vishwaroop I.T. Park, Plot No. 34, 35 & 38, Sector 30A of IIP, Vashi, Navi Mumbai – 400 703 | Contact No: +91 22 7196 6200 | 1800 266 8833 (Toll Free) | Timing: 9:00 am – 7:00 pm (Mon – Sat)| Email ID: customercare@sudlife.in | Visit: www.sudlife.in | For more details on risk factors, terms and conditions, please refer to the sales brochure carefully, before concluding the sale. |Trade-logo displayed belongs to M/s Bank of India, M/s Union Bank of India and M/s Dai-ichi Life International Holdings LLC and are being used by Star Union Dai-ichi Life Insurance Co. Ltd. under license.
SUD Life Saral Jeevan Bima | UIN: 142N088V01 | A Non-Linked Non-Participating Pure Risk Premium Individual Life Insurance Plan Star Union Dai-ichi Life Insurance Company Limited |IRDAI Regn. No: 142 | CIN: U66010MH2007PLC174472
Registered Office: 11th Floor, Vishwaroop I.T. Park, Plot No. 34, 35 & 38, Sector 30A of IIP, Vashi, Navi Mumbai – 400 703 | Contact No: +91 22 7196 6200 | 1800 266 8833 (Toll Free) | Timing: 9:00 am – 7:00 pm (Mon – Sat)| Email ID: customercare@sudlife.in | Visit: www.sudlife.in | For more details on risk factors, terms and conditions, please refer to the sales brochure carefully, before concluding the sale. |Trade-logo displayed belongs to M/s Bank of India, M/s Union Bank of India and M/s Dai-ichi Life International Holdings LLC and are being used by Star Union Dai-ichi Life Insurance Co. Ltd. under license.
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