Claim Settlement Ratio of 99.23%~

Life Insurance: an apt tax saving tool for women too

In 2015, women are much ahead of just being homemakers! Be it any profession, they often become the frontrunners and win the race much like their male counterparts. Contrary to the popular notion, they earn hefty salaries; they run their families hand in hand with the men.

Investment plans also act as tax-planning tools, as many avenues help reduce tax liability. There are different types of investment plans, and by choosing the right one, you can invest according to your needs and grow your savings.Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th July 2024
Modified on: 7th July 2024
Reading Time: 15 Mins
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Therefore, it is equally important for women to save tax too alongside having a well-planned financial goal. Tax planning involves taking into consideration various factors such as the age of the assessee, total income earned and the financial goals of the assessee as an individual and from the perspective of her family. Most women start looking at tax saving avenues only in the January-March quarter of the financial year so as to submit the proof of investments to their employer by the end of that financial year. This is the time of the year when all financial advisors, banks or other financial intermediaries will also start approaching individuals with their tax saving ideas. However, it is prudent to consider and start investing early for tax-planning purposes. Today, there are numerous investment options available to woman investors which help save taxes.

Among other financial products, life insurance should definitely be a crucial tax saving option for a woman investor to include in her financial portfolio. Women often do not consider insurance, both life and health, as priority. However, with rising medical costs and growing incidents of lifestyle related illnesses, it makes sense to invest in an insurance plan that covers such exigencies. Investing in insurance is not only quite hassle-free, but it also provides for projected living costs, education expenses and retirement benefits.

Under Section 80C of the Income Tax Act, individuals have been provided many tax reliefs such as tax free investments of up to Rs. 150,000. One of the best tax saving options under this category is life insurance. It is a known fact that a life insurance policy is the most cost effective tool to provide financial protection to a woman’s family in case of unforeseen eventualities. However, the quantum of life insurance depends upon many factors such as income, expenses, liabilities, goals etc. Term insurance may be a right instrument for lump sum life insurance cover, whereas ULIPs are the best option for steady and sustained investment with an investment goal of 10-15 years. Since, tax benefit is the inherent advantage which comes with this product, she should consider this option only after analyzing her needs. It is also important to know that for policies starting April 1, 2012 and later, Section 80C of the Act currently allows a deduction on premium paid on life insurance policy only if the annual premium paid is less than 10% of the sum assured.
In 2013, the limit of the annual premium was increased from 10% to 15% of the sum assured for persons with disability or severe disability or suffering from diseases or ailments specified in the Income Tax Act. Thus, for these people, if the annual premium paid was up to 15% of the sum assured, the same could be availed as a deduction below Rs 1.5 lakh tax limit under Section 80C.

Another important option is for premium paid for health insurance. Under Section 80D of the Income Tax Act, one can avail deduction of up to Rs 15,000 for self, spouse and dependent children, while an additional Rs 20,000 is available for parents above the age of 60 (who fall in the senior citizens category) on premium paid for a health insurance plan.

These limits can include expenses of up to Rs 5,000 on preventive health check-ups. This is especially beneficial to women over the age of 30 – who are advised to have routine health check-ups as a matter of routine in order to detect and prevent specific illnesses. Cash payments for health check-ups are eligible for income tax deduction but health insurance premiums paid in cash are not.

Notwithstanding the above mentioned advantages, a detailed analysis should be done on the requirement and benefits of insurance policies before buying the right scheme. And, this is true for any financial instrument. Finally, she should review her insurance cover from time to time and increase the coverage to meet her financial goals. While tax-saving is important; the primary goal must be protection.

Disclaimers:
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~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. 

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Disclaimer

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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