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    LONG TERM SAVINGS

    How does Life insurance save tax and money?

    Last Updated On 01-08-2016

    The primary purpose of life insurance is to offer financial protection to your family by securing their future. But in retrospect, life insurance can also be an efficient way of saving tax.

    When you invest in life insurance the government deducts the amount of premium you pay for the insurance policy from your tax payments. For a term investment , retirement plan, wealth plan, savings plan or an endowment investment, you can save up your tax on a maximum taxable income of Rs. 1 lakh per annum.

    Following are the tax exclusions availed by a life insurance investor: 

    1. Premiums: Under Section 80C of the Income Tax Act, 1961, all life insurance policy premiums are exempt from tax within a limit of Rs. 1 lakh per year. Also, the government deems any claim amount availed by the beneficiaries or a bonus of the policyholders as tax free under the Section 10 (10D) of the Income Tax Act.
    2. ULIPs: Investments in ULIPs benefit the investor as market-linked policies that pose as insurance as well as investments are deducted from the person’s taxable income. 
    3. Retirement plans: The government exempts a maximum of Rs. 1 lakh on premiums paid for pension plans under Section 80CCC of the Income Tax Act.

    But one should also note that Section 80C covers investment from all kinds of health and life insurance premiums, wealth plans, government bonds, PPF investments etc. to a limit of Rs. 1 lakh per year. Thus, even if an investor pays premiums worth 1.5 lakhs for various policies, the most refund availed by him is of Rs. 1 lakh.

    Thus, when you invest in life insurance , it endows you with security, but tax saving is the cherry on top.

    • *Tax benefits are subject to conditions and other provisions of the Indian tax laws and are subject to amendments made thereto from time to time.

    Disclaimer:

    The aforesaid article presents the view or an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ before making any decision.

    PNB MetLife India Insurance Company Limited, Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka.
    IRDAI Registration Number 117. CI No: U66010KA2001PLC028883. For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding the sale.
    The marks “PNB” and “MetLife” are registered trademarks of Punjab National Bank and Metropolitan Life Insurance Company, respectively. PNB MetLife India Insurance Company Limited is a licensed user of these marks.
    Call us Toll-free at 1-800-425-6969 Phone: 080-66006969, Website: www.pnbmetlife.com, Email: indiaservice@pnbmetlife.co.in or Write to us: 1st Floor, Techniplex -1, Techniplex Complex, Off Veer Savarkar Flyover, Goregaon (West), Mumbai – 400062, Maharashtra. Phone: +91-22-41790000, Fax: +91-22-41790203

    EC286 LD/2019-20/297

    BEWARE OF SPURIOUS PHONE CALLS AND FICTIOUS /FRAUDULENT OFFERS
    • IRDAI is not involved in activities like selling policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.

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    As your trusted life insurance partner, PNB MetLife is with you amidst the current COVID-19 outbreak. Our policies also cover COVID-19 Claims. In case of a Death Claim, kindly submit the signed Claim Intimation Letter mentioning the policy number, brief of the insured event and other claim documents on the email mentioned herewith. Please write-in to us at claimshelpdesk@pnbmetlife.com or indiaservice@pnbmetlife.co.in. You can also call us on 1800-425-6969 for death claims intimations and for any queries on Monday - Saturday between 10:00 am - 7:00 pm.

    PNB MetLife Insurance, amongst the trusted Life Insurance companies in India, aims to provide a wide range of Life Insurance products that suits the needs of an individual at every stage of his life. Life Insurance Plans range from Term Life Insurance PlansTerm PlanProtection PlansLong Term Savings Plans , Retirement Plans & Child Education Plan.

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