Taxability of Home Loan Protector Insurance Claim

One case of my relative. He received payment of claim  of crtical illness under Secure mind  policy, which is home loan protector policy.

After 25 installments, his loan was fully repaid by insurer.

Out of lumpsum amount payment, the balance payment over and above the principle outstanding was paid to him.

Is the total amount taxable.???

Replies (2)
Quick Summary
This discussion explores the taxability of a critical illness claim payout from a Home Loan Protector policy. The insurer repaid the outstanding home loan and paid a balance amount to the policyholder. While the policy wording and TDS deduction status are being investigated, the core question is whether the lump sum received by the insured, beyond the principal outstanding, is subject to tax.

Check the insurance policy terms, and TDS deducted if any.....

Only after verification of the terms, one can decide its tax-ability.....

ICICI Secure Mind policy wording is not showing anything about Tax on claim payment. No TDS has bren deducted. The insurer has paid a lumpsum amount (sum insurred). Rs. 25 lacs paid to Home loan acct and Rs. 1.5 lacs paid to Insured. 

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