Tax Benefits of Term Life Insurance
Term life insurance plans come with excellent tax benefits. You can avail lucrative tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act, 1961. Additionally, the premiums paid for the Critical Illness Benefit also qualifies for a deduction under Section 80D.
Note: Tax benefits are subject to changes in tax laws. Please consult your tax advisor for details.
How to Choose the Best Term Insurance Plan?
Term insurance plans have become extremely popular in the last few months owing to a big drop in the cost of premium amount and huge amount of cover. For example, you can get Rs 1 crore of term insurance by paying something below Rs 500 per month.
While we understand the importance of having a term insurance what confuses a buyer is – How much death benefit cover do I need?
Below given are the factors that one must consider to ascertain the amount of cover required:
Your lifestyle characterized by annual income, dependents and liabilities is an important deciding factor. Ideally, one should have a life cover of 15-20 times their annual income. A married person with children should have higher life cover than a bachelor. Somebody with a home loan to pay off should have higher life cover. Also, consider the factor of inflation in paying premiums and coverage benefits.