Does Term Insurance Comes Under 80C

Term insurance is a form of life insurance policy that provides life coverage for a set period, generally between 10 and 30 years. The policy benefit is paid to the beneficiaries in case of the policyholder's untimely demise within that term. As opposed to other life insurance policies, there is no cash value or investment component associated with the term insurance plan; this is purely protection. Hence, premium charges for term insurance are highly affordable. 

4 Key Features of Term Insurance

Term insurance has unique features and serves different purposes. Let's examine some of its most essential features: 

1. Customisation 
You can select the coverage amount based on your family's needs and personal requirements. You also get to decide the policy tenure of your term insurance policy. Not only that, term insurance plans are highly flexible. You can increase or decrease (adjust) the coverage amount and policy tenure and add riders as your circumstances evolve over time.

2. Tax Benefits 
Premiums and payouts qualify for tax deductions under Sections 10(10D), 80C, and 80D, offering policyholders a significant term insurance exemption in Income Tax. 

3. Affordability 
Term insurance is more affordable than regular insurance policies. Top insurers in India offer the option to make monthly premium payments. This further enhances the affordability of term insurance across various income levels in India. 

4. Peace of Mind 
Knowing that your family's financial requirements will be taken care of adds a layer of peace to your mind. 

Tax Benefits of Term Insurance 

Did you know that you could avail of tax benefits under sections 10(10D), 80(C), and 80(D) of the Income Tax Act of 1961? Let’s understand them: 

A. Benefits Under Section 10 (10D)
This section states that the money received as a death benefit after the policyholder passes away is exempt from the payment of taxes. The exemption applies if the annual premium payment is less than 10% of the sum assured for policies issued on or after April 1, 2012.

B. Benefits Under Section 80C
This section makes you eligible for tax deductions up to ₹1.5 lakhs on the premium payments of your term insurance policies. Your annual premium payment should not exceed 10% of the sum assured.  This limit is 20% for policies purchased before March 31, 2012. 

C. Benefits Under Section 80D
This section is valid if you apply for policy add-ons and riders in cases of accidents and critical illnesses. It makes you eligible for deductions up to ₹25,000. For senior citizens, these deductions can extend up to ₹50,000.

Cheapest Term Insurance in India

According to the World Bank classification, India remains a lower-middle-income country. Large sections of the population struggle daily to secure a good living for their loved ones. 

Who isn't on the lookout to save money whenever possible? The same applies to life insurance and term insurance policies. More often than not, people in India look for the cheapest life insurance and term insurance policies. While numerous insurers offer term insurance plans, the pricing varies significantly between providers, with some offering more competitive rates than others. 

Conclusion

A term insurance policy offers a financial safety shield to your family in case of your unfortunate demise. With the help of the right coverage amount and policy tenure, you can ensure that your dependents do not struggle financially to attain essential milestones in life. In addition to providing essential financial protection, a term insurance plan also makes you eligible for tax deductions under Section 80C for premiums paid. 

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