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Benefits of life insurance policy

Prabhu Kumar (11 Points)

22 March 2023

What are the benefits of life insurance policy?

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Ayush (Executive ) (6232 Points)
Replied 22 March 2023

Life insurance policies offer several benefits from an income tax perspective in India. Some of these benefits are:

Tax Deduction under Section 80C: The premium paid towards a life insurance policy is eligible for a tax deduction of up to Rs. 1.5 lakh per annum under Section 80C of the Income Tax Act, 1961.
Tax-Free Maturity Benefits: The maturity benefits received from a life insurance policy are tax-free under Section 10(10D) of the Income Tax Act, 1961, subject to certain conditions.
Tax Benefits on Rider Benefits: Additional rider benefits such as critical illness cover, accidental death benefit, or disability benefit added to a life insurance policy are also eligible for tax deductions under Section 80C.
Tax Benefits on Death Benefits: The death benefits received by the nominee or legal heir of the insured person are tax-free under Section 10(10D) of the Income Tax Act, 1961.
Tax Exemption on Surrender Value: In case of a traditional life insurance policy, if the policy is surrendered or the insured person opts for a loan against the policy, the amount received is exempted from tax under certain conditions.

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