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Understanding Term Insurance Tax Benefits For Women In India

Financial independence for women is no longer an alien concept in India. Neither is their participation in investment decisions. As women increasingly take up financial and emotional responsibilities in the family, it’s worthy to look at investment choices that would blend both. Designed to protect the financial future from the unpredictability of life, a term insurance for women can bring mental peace keeping the policyholder and her family in a good emotional space. Alongside, the term insurance tax benefits for women may add to its financial viability.

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Written ByShruti gujarathi
AboutShruti gujarathi
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Shruti gujarathi has 5 years of experience in the BFSI sector, and as Manager- Digital Marketing at Bajaj Allianz Life Insurance, manages digital and content marketing. She has had hands-on experience in content strategy, performance marketing and Strategic Alliances over a career spanning 10 years.
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: 23rd April 2025
Modified on: 27th April 2025
Reading Time: 15 Mins
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What is term life insurance for women?


Term insurance for women is a life insurance plan designed to ensure financial security , through the sum assured to the nominees upon untimely demise of the life assured within the policy term. Offering wholesome financial protection, thus the term life insurance for women may be of benefit, whether you are a wife safeguarding the spouse’s future or a single woman securing the future of your dependent parents or children. These plans offer tax benefits, optional riders which are available at an additional nominal premium covering critical diseases as mentioned in the rider . This depends on insurers terms and conditions.


Importance of tax planning for women and how term insurance fits into that plan?


As recorded by the Periodic Labour Force Survey (PLFS) by the Ministry of Statistics and Programme Implementation, the Worker Population Ratio (WPR) for women marked a notable 40.3% in 2023-24. The increasing percentage of working women calls for efficient tax planning. Here, wise financial choices may help them save on taxes through deductions, which in turn can add up to significant savings for the family. So how does term insurance fit into that plan?


A term insurance comes with tax benefits that allow the policyholder to claim deductions in the taxable income. The term plan tax benefits for women thus may not just help in reducing the taxes payable, but in contributing to family savings too, making it a worthy financial tool.


Term insurance tax benefits for Women


Understanding the tax benefits of buying a term plan for women may give you better clarity on how it can align with efficient financial planning. This may give you ample scope to compare a term insurance for women with other tax-saving choices.

 

So, what are the tax benefits of term insurance for women?


The term insurance for women can reduce the taxable income under the provisions of the Income Tax Act 1961. Here’s a detailed view.


Under section 80C:


Deductions are available for an annual premium payment of up to Rs 1.5 lakhs under section 80C (in case of old tax regime).


Under section 80D:


For premiums paid towards a term plan with a critical illness rider, an additional deduction of up to Rs 25,000 a year can be claimed for self, spouse, and children under section 80D (in case of old tax regime).


Under section 10(10D):


The nominee is entitled to get the sum assured as a death benefit if the life assured dies within the policy term. This payout is completely tax-free under section 10(10D).


Life Insurance For Women & Tax Benefits That Come With It


Change in lifestyle has led to women becoming prone to certain critical diseases like cancer etc . Also, there can be situations of permanent disability due to an accident or a disease. Catering to these medical needs, term insurance for women allows to add riders such as the critical illness rider . Choosing them can make way for additional term insurance tax benefits for women through deductions under sections 80D and 80DDB (in case of old tax regime).


How to choose the right term insurance for maximum tax benefits


There is no single solution that can be termed as the right term life insurance for everyone. Likewise, every woman has specific needs that should be reflected in her choice of term plan. On the same lines, there are various scopes of tax savings under the provisions of the Income Tax Act 1961. It may be worthy to keep them in mind to maximise the tax benefits of the term plan for women.


Here’s an overview of how to go about it.


Tax planning strategy for women


Following are some tips that might aid in effectively using a term plan as a tax planning tool.


  • Aligning the sum assured to your financial needs and goals may help as the death benefit is tax-free.
  • Choose a term plan that aligns with your current and future financial goals. Picking riders wisely may enhance the scope of deductions.
  • Having a longer tenure for the term plan may result in higher tax savings and more efficient financial management.

How to claim tax benefits on term insurance for women


To reap the most of term insurance tax benefits, one needs a clarity of the provisions of the Income Tax Act 1961 under its different sections. Tax benefits of a term plan for women can be claimed under sections 80C, 80D, 80DDB, and 10(10D) (in case of old tax regime). But to claim all possible deductions and exemptions, you may need proper awareness regarding the conditions specified by those sections and subsections.


Eligibility criteria for tax benefits:


  • Provisions of sections 80C, 80D, and 80DDB can be availed through tax calculations under the old tax regime.
  • Under section 80C, the premium paid should not be higher than 10% of the sum assured (if policy is issued post 1 April 2012).
  • No tax benefit against premium payment is available if there’s a surrender or termination of policy within two years of issuance.
  • Section 80D deductions are available on a per annum basis for critical illness or other health-related riders (in case of old tax regime).
  • Additional deductions under section 80D can be claimed for the parent’s insurance policy for up to Rs 25,000 a year if he/she is under 60 and up to Rs 50,000 for senior citizen parents(in case of old tax regime).

Conclusion


Efficient availing of the term plan tax benefits for women may thus help gain a stronger financial foothold. Not just for the woman, but for her family too.


FAQs


a. Can I use term insurance as a tax-saving instrument along with other investments?


Yes, you can use term insurance as a tax-saving instrument alongside other investments as long as you fulfil the necessary criteria.


b. Which payments are eligible for Tax Deductions on Term Insurance for Women ?


Premium payments, medical expenses, and the death benefit payout are eligible for tax deductions subject to sections of the Income Tax Act 1961.


c. Is the death benefit of a term insurance policy taxable?


No, the death benefit of a term insurance policy is tax-free.


d. How to maximise term insurance tax benefits for women?


The premium paid towards a term life insurance plan is eligible for a deduction according to Section 80C (under old tax regime) of The Income Tax Act, 1961. You can claim a deduction up to ₹ 1.5 lakh per annum.


e. Who is eligible to claim tax benefits on term plans for women?


The premiums paid towards a term insurance plan are subject to tax deductions under section 80C of the Income Tax Act. In addition, the death benefit in case of the demise of the life assured within the policy tenure are also tax free under section 10(10D) of the Income Tax Act.


f. What other insurance-related tax benefits are available to women?


Deductions for critical illness treatment and parent’s insurance are available as insurance-related tax benefits to women (in case of old tax regime).


g. Is there a maximum limit for tax deductions on term insurance premiums?


Yes, deductions can be claimed for annual premium payments up to Rs 1.5 lakhs and an additional Rs 25,000 towards health-related riders (in case of old tax regime).


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The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read the sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale. Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in

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

BJAZ-WEB-EC-14397/25

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*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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%%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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Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*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%.

~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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