Saturday, July 10, 2010
ING Life to invest Rs 2.40 bn for expansion plans
ING Life India, part of the ING Group, has announced its 5-year growth ambition, including growing the business by 5 times and growing its customer base to 5 million. The company will be infusing fresh capital of Rs 2.40 billion in FY 2010-11 to fund its expansion.Unveiling the 5-year ambition for ING Life India, Tom McInerney, COO - ING Insurance said, ``ING sees its Asia-Pacific businesses to lead the growth in insurance worldwide. Within ING Asia-Pacific, India is uniquely placed and a frontrunner of this growth. We have a huge opportunity in this market and we are committed to see this business grow.``ING Life India`s 5-year ambition will be driven by expanding its distribution network, improving its productivity and building efficiencies. ING Life currently has a strong captive distribution network, including its tied agency force and bancassurance. It has a presence panning 232 cities across the country, with over 55,000 tied agents and a strong Bancassurance partner, ING Vysya Bank.Explaining the plan, Kshitij Jain, MD & CEO, ING Life India said, ``Over the last 18 months, we had focused on consolidating our business and strengthening its foundation. The company is ready to embark on its next phase of growth. This growth will come from expanding our current distribution network and building further on our productivity. We are targeting to grow our Business by 5 times and achieve a customer base of over 5 million in the next 5 years.``Explaining the company`s focus on driving efficiency, Jain said, ``We have built an efficient business, and will continue to drive this as an important focus area. The board has approved the infusion of Rs 2.40 billion additional capital in 2010-11 to fund the next phase of growth.``ING Life India`s total premium income (TPI) has grown CAGR 40% in the last 5 years, closing at Rs 16.43 billion for FY 2009-10. Its asset under management has shown a significant growth at CAGR 66%, and the company now manages over 45 billion. ING Life India`s declining opex/TPI ratio is a result of its sharp focus on managing its business efficiently. Declining opex/TPI ratio is a key indication of efficiency in life insurance business. ING Life India today has presence across 232 cities. The company is capitalized at over Rs 12 billion, with a solvency margin of 2.21 times.
Tuesday, June 29, 2010
New Laws for ULIPs
यूलिप के लिए दिशानिर्देश जारी
नई दिल्ली, प्रेट्र : बीमा नियामक इरडा ने सोमवार को यूनिट लिंक्ड बीमा उत्पादों यानी यूलिप के लिए नए दिशानिर्देश जारी कर दिए। यूलिप पर नियंत्रण को लेकर बाजार नियामक सेबी से रस्साकशी में जीत हासिल करने के बाद निवेशकों को इनका बेसब्री से इंतजार था। उम्मीद के मुताबिक इरडा ने नए दिशानिर्देशों में सख्ती बरती है। उसने न केवल धन निकासी की अवधि यानी लॉक इन पीरियड बढ़ा दिया है, बल्कि बीमा कवर को बढ़ाने के लिए भी बीमा कंपनियों से कहा है। इन दिशानिर्देशों को बीमा कंपनियों को एक सितंबर से लागू करना है। इरडा की ओर से सोमवार को जारी एक सर्कुलर में सभी यूलिप उत्पादों के लिए लॉक-इन पीरियड को तीन साल से बढ़ाकर पांच साल कर दिया गया है। इससे यूलिप दीर्घकालीन वित्तीय उत्पाद बन गए हैं जो जोखिम से सुरक्षा प्रदान करते हैं। ऐसे उत्पादों पर बीमा कवर देने की भी बात कही गई है, जिसमें पहले वर्ष का प्रीमियम बढ़ाकर 10 गुना कर दिया गया है। फिलहाल यह पांच गुना है। इन कदमों के साथ इरडा ने यूलिप के मामले में बीमा पहलुओं को बढ़ाने की कोशिश की है। सेबी और इरडा के बीच विवाद की जड़ यह थी कि सेबी इन्हें निवेश उत्पाद मानता आया था, वहीं इरडा का कहना था कि ये बीमा उत्पाद हैं। उम्मीद के मुताबिक इरडा ने कमीशन और खर्चो में भी कटौती कर दी है। नियामक ने साफ कहा है कि बीमा कंपनियों को सभी यूलिप पर पेंशन के अलावा हेल्थ और लाइफ कवर देना होगा। नए दिशानिर्देशों में यूलिप उत्पादों पर 4.5 प्रतिशत का सालाना रिटर्न देने के लिए भी कहा गया है।
Saturday, June 19, 2010
Ulips, equity MFs to lose tax cover in new-look Code
Ulips, equity MFs to lose tax cover in new-look Code
http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/Ulips-equity-MFs-to-lose-tax-cover-in-new-look-Code/articleshow/6056607.cms
NEW DELHI: Unit-linked insurance plans (Ulips), equity-oriented mutual fund schemes and a number of other popular savings and investment instruments will lose their tax immunity, and with it, their attractiveness when the Direct Taxes Code (DTC) comes into operation. The Central Board of Direct Taxes (CBDT) plans to reduce the number of instruments that qualify for tax deductions to only about half a dozen, its chairman SSN Moorty said, as the government overhauls the direct tax regime to try and make it simpler, boost revenues and encourage long-term savings. The Rs 3-lakh tax deduction limit proposed in the draft DTC will also be lowered. Revised proposals for a new Direct Taxes Code to replace the nearly 50-year-old Income-Tax Act were unveiled on Tuesday. The government has said it hopes to operationalise the code by April 2011. Ulips, which are hybrid products incorporating investment and insurance cover as traits, are particularly popular. In the 2009-10 fiscal, such products accounted for more than four-fifths of the total insurance premium of around Rs 2.60 lakh crore that was collected. They are controversial too: capital market regulator Sebi and insurance regulator Irda are involved in a tug-of-war over who has the right to regulate Ulip products. “Ulips will be out of the exempt, exempt, exempt (EEE) tax regime,” said a senior finance ministry official, referring to the different stages at which financial instruments may be taxed. At present, individuals who invest in Ulips do not pay tax at any stage—at the time of investment or contribution, during the tenure of investment, or at maturity. It qualifies for tax deduction along with a host of other savings schemes, including bank deposits, equity-oriented mutual funds, national savings certificate deposits and principal repayment on home loans. Taxpayers can claim a deduction of up to Rs 1 lakh a year on these instruments. “Tax benefits are a key driver for insurance penetration and dilution of any benefits will have an impact on penetration,” said GV Nageswara Rao, MD and CEO, IDBI Fortis Life insurance. The revised proposals make it clear that only six schemes—public provident fund (PPF), the pension scheme administered by the Pension Fund Development Regulatory Authority, general provident fund, recognised provident funds and pure life insurance and annuity schemes—will be tax-free. Tax will not be levied at any stage on these schemes. The new pension scheme will also be covered by the EEE method of taxation and withdrawals will not be taxed at maturity. However, investments made before the DTC comes into force will continue to be eligible for the EEE method of tax treatment for the full duration of the financial instrument. This means an investor who buys a Ulip before the DTC comes into force will not be taxed at any stage during the full tenure. Ulips could be taxed at the time of maturity, but the government has not clarified yet the tax treatment of the products. “The existing tax treatment of Ulips is beneficial as it helps in the flow of funds to the infrastructure sector, besides contributing significantly to the capital market”, said R Kannan, member-actuary, Irda. The original code had proposed the concept of savings intermediaries that would invest the amounts deposited with them in Ulips, equity-linked mutual fund schemes, debt-oriented mutual fund schemes or other financial products depending on investors’ choice. Withdrawals would be taxed, but not a rollover. CBDT has dropped the proposal to tax savings instruments at maturity in the absence of a social security system. The aim now is to encourage taxpayers to invest in long-term savings schemes. PPF, for instance, has a 15-year tenure, although partial withdrawals are allowed after the sixth year. The revised discussion paper has said the rules for contribution and withdrawal will be harmonised and made uniform so that savings are made by the taxpayer for the long term.
http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/Ulips-equity-MFs-to-lose-tax-cover-in-new-look-Code/articleshow/6056607.cms
NEW DELHI: Unit-linked insurance plans (Ulips), equity-oriented mutual fund schemes and a number of other popular savings and investment instruments will lose their tax immunity, and with it, their attractiveness when the Direct Taxes Code (DTC) comes into operation. The Central Board of Direct Taxes (CBDT) plans to reduce the number of instruments that qualify for tax deductions to only about half a dozen, its chairman SSN Moorty said, as the government overhauls the direct tax regime to try and make it simpler, boost revenues and encourage long-term savings. The Rs 3-lakh tax deduction limit proposed in the draft DTC will also be lowered. Revised proposals for a new Direct Taxes Code to replace the nearly 50-year-old Income-Tax Act were unveiled on Tuesday. The government has said it hopes to operationalise the code by April 2011. Ulips, which are hybrid products incorporating investment and insurance cover as traits, are particularly popular. In the 2009-10 fiscal, such products accounted for more than four-fifths of the total insurance premium of around Rs 2.60 lakh crore that was collected. They are controversial too: capital market regulator Sebi and insurance regulator Irda are involved in a tug-of-war over who has the right to regulate Ulip products. “Ulips will be out of the exempt, exempt, exempt (EEE) tax regime,” said a senior finance ministry official, referring to the different stages at which financial instruments may be taxed. At present, individuals who invest in Ulips do not pay tax at any stage—at the time of investment or contribution, during the tenure of investment, or at maturity. It qualifies for tax deduction along with a host of other savings schemes, including bank deposits, equity-oriented mutual funds, national savings certificate deposits and principal repayment on home loans. Taxpayers can claim a deduction of up to Rs 1 lakh a year on these instruments. “Tax benefits are a key driver for insurance penetration and dilution of any benefits will have an impact on penetration,” said GV Nageswara Rao, MD and CEO, IDBI Fortis Life insurance. The revised proposals make it clear that only six schemes—public provident fund (PPF), the pension scheme administered by the Pension Fund Development Regulatory Authority, general provident fund, recognised provident funds and pure life insurance and annuity schemes—will be tax-free. Tax will not be levied at any stage on these schemes. The new pension scheme will also be covered by the EEE method of taxation and withdrawals will not be taxed at maturity. However, investments made before the DTC comes into force will continue to be eligible for the EEE method of tax treatment for the full duration of the financial instrument. This means an investor who buys a Ulip before the DTC comes into force will not be taxed at any stage during the full tenure. Ulips could be taxed at the time of maturity, but the government has not clarified yet the tax treatment of the products. “The existing tax treatment of Ulips is beneficial as it helps in the flow of funds to the infrastructure sector, besides contributing significantly to the capital market”, said R Kannan, member-actuary, Irda. The original code had proposed the concept of savings intermediaries that would invest the amounts deposited with them in Ulips, equity-linked mutual fund schemes, debt-oriented mutual fund schemes or other financial products depending on investors’ choice. Withdrawals would be taxed, but not a rollover. CBDT has dropped the proposal to tax savings instruments at maturity in the absence of a social security system. The aim now is to encourage taxpayers to invest in long-term savings schemes. PPF, for instance, has a 15-year tenure, although partial withdrawals are allowed after the sixth year. The revised discussion paper has said the rules for contribution and withdrawal will be harmonised and made uniform so that savings are made by the taxpayer for the long term.
Thursday, June 17, 2010
ING GOLDEN LIFE
ING GOLDEN LIFE-is one of the top three Retirement Plans in the Country (Financial Cronical Nov 2009)
Today when you look ahead in life your golden years may seem far away, but only if you plan towards the future ‘Today’ will these dreams become a reality. It’s vital to save systematically and have a financial plan that helps you stay in control of your retired life and live the way you want to. As a unit linked investment plan – ING New Golden Life offers you the perfect solution that will help you realize the retired life of your choice, with a wide range of Benefits that are personalized to suit your needs and ensures that your life after retirement is the golden period of your life.
Key Benefits
*Flexibility to choose your age of retirement / vesting date
*Loyalty units to grow your fund faster
*Flexible Investment Strategy - Manage your own investments or choose the Life Stage Investment
Product Features
*Eligibility
Minimum Age at Entry: 18 years
Maximum Age at Entry: 65 years
Minimum Vesting Age: 45 years
Maximum Vesting Age: 75 years
*Minimum Yearly Premium
For Premium Payment Term: Less than or equal to 10 years - Rs.30,000 p.a.
For Premium Payment Term: Greater than 10 years:- Rs.18,000 p.a.
*Maximum Yearly Premium
There are no limits on the maximum premium payable
*Premium Paying Term
5 to 30 years (for Regular premium)
*Vesting Period
Minimum Vesting Period: 10 years
Maximum Vesting Period: 57 years
Vesting periods allowed are 10, 15, 16… 57 years
Today when you look ahead in life your golden years may seem far away, but only if you plan towards the future ‘Today’ will these dreams become a reality. It’s vital to save systematically and have a financial plan that helps you stay in control of your retired life and live the way you want to. As a unit linked investment plan – ING New Golden Life offers you the perfect solution that will help you realize the retired life of your choice, with a wide range of Benefits that are personalized to suit your needs and ensures that your life after retirement is the golden period of your life.
Key Benefits
*Flexibility to choose your age of retirement / vesting date
*Loyalty units to grow your fund faster
*Flexible Investment Strategy - Manage your own investments or choose the Life Stage Investment
Product Features
*Eligibility
Minimum Age at Entry: 18 years
Maximum Age at Entry: 65 years
Minimum Vesting Age: 45 years
Maximum Vesting Age: 75 years
*Minimum Yearly Premium
For Premium Payment Term: Less than or equal to 10 years - Rs.30,000 p.a.
For Premium Payment Term: Greater than 10 years:- Rs.18,000 p.a.
*Maximum Yearly Premium
There are no limits on the maximum premium payable
*Premium Paying Term
5 to 30 years (for Regular premium)
*Vesting Period
Minimum Vesting Period: 10 years
Maximum Vesting Period: 57 years
Vesting periods allowed are 10, 15, 16… 57 years
Sunday, June 13, 2010
ING Term Life - A Term Insurance Policy
ING Term Life - A Term Insurance Policy
'Let their dreams live’
You have always worked towards providing your family the best that life has to offer. After all, seeing your family happy and comfortable is a source of immense joy for you, as well. And ensuring your family continues to enjoy a comfortable lifestyle even in your absence is your top priority. ING Life Insurance offers you a simple and very economical way to achieve this objective, so your family can maintain a secure and good lifestyle, no matter what tomorrow may have in store.The ING Term Life is a Term Insurance Policy and is the simplest form of insurance, where the Life Assured is provided insurance cover and on his death during the policy term, the sum assured under the policy is paid to his beneficiary. What is more, the ING Term Life is one of the most affordable and inexpensive ways of obtaining life insurance cover.For more details on risk factors, terms and conditions please read the Brochure and Benefit Illustration carefully before concluding a sale.
Key Benefits
*Protection Cover: Upwards of 10 lacs Sum Assured
*Flexibility to choose a policy term between 10 and 30 years
*Flexible Premium Paying Term: Single, Limited & Regular pay options
*In the event of death of the LA during the policy term, the sum assured chosen under the policy shall be payable
*Optional riders for comprehensive accidental coverage in regular payment option
*Tax benefit under Sec. 80c and Sec. 10(10D) of the Income Tax Act 1961
Product Features
*Eligibility
Minimum entry age : 18 years
Maximum entry age : 65 years
Maximum maturity age: 75 years
*Sum Assured
The minimum sum assured you can opt under this plan is Rs.10 Lakhs.
*Policy Term
You have the flexibility to choose a policy term between 10 and 30 years.
*Premium Payment Terms
Regular premium - till policy term completion
Limited premium - 3 or 5 years
Single premium - is a one time payment
*Premium Payment Options
Annual , Half-yearly , Quarterly or Monthly
Premium Calculator:
http://calculator.inglife.co.in/SalesIllustration/JSP/ils.jsp?null
'Let their dreams live’
You have always worked towards providing your family the best that life has to offer. After all, seeing your family happy and comfortable is a source of immense joy for you, as well. And ensuring your family continues to enjoy a comfortable lifestyle even in your absence is your top priority. ING Life Insurance offers you a simple and very economical way to achieve this objective, so your family can maintain a secure and good lifestyle, no matter what tomorrow may have in store.The ING Term Life is a Term Insurance Policy and is the simplest form of insurance, where the Life Assured is provided insurance cover and on his death during the policy term, the sum assured under the policy is paid to his beneficiary. What is more, the ING Term Life is one of the most affordable and inexpensive ways of obtaining life insurance cover.For more details on risk factors, terms and conditions please read the Brochure and Benefit Illustration carefully before concluding a sale.
Key Benefits
*Protection Cover: Upwards of 10 lacs Sum Assured
*Flexibility to choose a policy term between 10 and 30 years
*Flexible Premium Paying Term: Single, Limited & Regular pay options
*In the event of death of the LA during the policy term, the sum assured chosen under the policy shall be payable
*Optional riders for comprehensive accidental coverage in regular payment option
*Tax benefit under Sec. 80c and Sec. 10(10D) of the Income Tax Act 1961
Product Features
*Eligibility
Minimum entry age : 18 years
Maximum entry age : 65 years
Maximum maturity age: 75 years
*Sum Assured
The minimum sum assured you can opt under this plan is Rs.10 Lakhs.
*Policy Term
You have the flexibility to choose a policy term between 10 and 30 years.
*Premium Payment Terms
Regular premium - till policy term completion
Limited premium - 3 or 5 years
Single premium - is a one time payment
*Premium Payment Options
Annual , Half-yearly , Quarterly or Monthly
Premium Calculator:
http://calculator.inglife.co.in/SalesIllustration/JSP/ils.jsp?null
Press Release
Press Release
April 10, 2010
Unit Linked Insurance Products (ULIPs) offered by different Insurance Companies
In the context of the recent directions of the Securities and Exchange Board of India (SEBI) to 14 insurance companies directing them not to issue any offer document, advertisement, brochure soliciting money etc from investors, the IRDA deems it appropriate to issue the following statement.
“Policyholders of the Unit Linked Insurance Products (ULIPs) offered by different insurance companies are assured that these policies are safe and secure and the matters arising out of the recent orders of the SEBI will be addressed expeditiously in the appropriate forum in accordance with Law.”
/sd.-(J. Hari Narayan)Chairman
Place : HyderabadDate : 10.04.2010
April 10, 2010
Unit Linked Insurance Products (ULIPs) offered by different Insurance Companies
In the context of the recent directions of the Securities and Exchange Board of India (SEBI) to 14 insurance companies directing them not to issue any offer document, advertisement, brochure soliciting money etc from investors, the IRDA deems it appropriate to issue the following statement.
“Policyholders of the Unit Linked Insurance Products (ULIPs) offered by different insurance companies are assured that these policies are safe and secure and the matters arising out of the recent orders of the SEBI will be addressed expeditiously in the appropriate forum in accordance with Law.”
/sd.-(J. Hari Narayan)Chairman
Place : HyderabadDate : 10.04.2010
NOTICE PERTAINING TO LICENCING OF CORPORATE AGENTS
CORPORATE AGENTS
June 08, 2010.
NOTICE PERTAINING TO LICENCING OF CORPORATE AGENTS
Attached is the list of 4261 Corporate Agencies in our data base which were due for renewal on or before 31.03.2010 but have not been renewed till date. All these Corporate Agency Licenses have been withdrawn from our database. Insurers and General public are hereby cautioned not to transact any insurance business through them.
(Suresh Mathur)
Joint Director -IRDA
June 08, 2010.
NOTICE PERTAINING TO LICENCING OF CORPORATE AGENTS
Attached is the list of 4261 Corporate Agencies in our data base which were due for renewal on or before 31.03.2010 but have not been renewed till date. All these Corporate Agency Licenses have been withdrawn from our database. Insurers and General public are hereby cautioned not to transact any insurance business through them.
(Suresh Mathur)
Joint Director -IRDA
Saturday, February 13, 2010
ING Flexi Life Plus
ING Flexi Life Plus
ING Flexi Life Plus is a unit linked insurance policy giving the dual benefit of insurance coverage & investment opportunity. It is a comprehensive plan that provides flexibility in premium contributions through payment modes with the option to increase or decrease of regular premiums. The plan allows you the choice of extending your life cover after payment of premiums for the first five years, the amount accumulated in your fund will be given as maturity benefit, while withdrawal facilities during the term will help you to meet financial contingencies. This plan also provides an Enhanced Accidental Protection Benefit, which provides additional benefit on death due to accident. You are allowed to make partial withdrawals during the policy term after the initial lock-in period of three years. For more details on risk factors, terms and conditions
Key Benefits
*Flexibility to increase / decrease the regular premium
*Enhanced Accidental Protection Benefit
*Cover continuation option
Eligibility Criteria
Minimum age at entry : 0 years lbd (for entry ages below 12 years, risk cover commences from age 5 or 2 years from policy commencement date, whichever is later)
Maximum age at entry : 60 years
Minimum age at maturity : 18 years
Maximum age at maturity : 70 years
Policy Term : 10 / 20 years
Premium Paying Term : Same as policy term
Premium Payment Modes : Regular (Annual, Half-yearly, Quarterly, Monthly)
Top-up Premium : Minimum: Rs. 2,000
Sum Assured :Minimum: 6.25 times the annualized first policy year regular premium Maximum: 25 times of Annualized first policy year regular Premium subject to underwriting conditions
Minimum Premium Payable Rs 48000.00
Yearly
Half-Yearly
Quarterly
Monthly
2nd year onwards
75% of 1st policy year premium
Top-Up Premium
Additional top-up premium subject to a minimum of Rs 2,000 over and above the regular premiums paid, without exceeding 25% of the total regular premiums paid.
Maximum premium
No limit, but subject to underwriting considerations for the first policy year but from the second policy year onwards the maximum premium payable would be 125% of the first policy year annualized premium on an annualised basis
http://www.inglife.co.in/productcenter/productcenter-investment-FlexilifePlus.shtml
ING Flexi Life Plus is a unit linked insurance policy giving the dual benefit of insurance coverage & investment opportunity. It is a comprehensive plan that provides flexibility in premium contributions through payment modes with the option to increase or decrease of regular premiums. The plan allows you the choice of extending your life cover after payment of premiums for the first five years, the amount accumulated in your fund will be given as maturity benefit, while withdrawal facilities during the term will help you to meet financial contingencies. This plan also provides an Enhanced Accidental Protection Benefit, which provides additional benefit on death due to accident. You are allowed to make partial withdrawals during the policy term after the initial lock-in period of three years. For more details on risk factors, terms and conditions
Key Benefits
*Flexibility to increase / decrease the regular premium
*Enhanced Accidental Protection Benefit
*Cover continuation option
Eligibility Criteria
Minimum age at entry : 0 years lbd (for entry ages below 12 years, risk cover commences from age 5 or 2 years from policy commencement date, whichever is later)
Maximum age at entry : 60 years
Minimum age at maturity : 18 years
Maximum age at maturity : 70 years
Policy Term : 10 / 20 years
Premium Paying Term : Same as policy term
Premium Payment Modes : Regular (Annual, Half-yearly, Quarterly, Monthly)
Top-up Premium : Minimum: Rs. 2,000
Sum Assured :Minimum: 6.25 times the annualized first policy year regular premium Maximum: 25 times of Annualized first policy year regular Premium subject to underwriting conditions
Minimum Premium Payable Rs 48000.00
Yearly
Half-Yearly
Quarterly
Monthly
2nd year onwards
75% of 1st policy year premium
Top-Up Premium
Additional top-up premium subject to a minimum of Rs 2,000 over and above the regular premiums paid, without exceeding 25% of the total regular premiums paid.
Maximum premium
No limit, but subject to underwriting considerations for the first policy year but from the second policy year onwards the maximum premium payable would be 125% of the first policy year annualized premium on an annualised basis
http://www.inglife.co.in/productcenter/productcenter-investment-FlexilifePlus.shtml
Give life insurance top priority while making plans
Give life insurance top priority while making plans
Life insurance should form an integral part of an individual’s financial planning. It should be seen as a security that one can provide to his family to meet future uncertainty. The type of the insurance policy and the amount of the financial cover which an individual may choose is a matter of his personal choice and depends upon the number of factors including his age, future financial commitment, income level, etc.
Apart from the financial cover to meet future uncertainties, life insurance can also be looked at as one of the important tax-saving instruments on account of income-tax benefits available under the Income Tax Act, 1961 (The Act).
Income-tax benefits
The income-tax benefits in respect of the life insurance can be broadly classified under two categories. First, the benefit available in respect of payment of the life insurance premium and second, in relation to the amount received under a life insurance policy on maturity or on happening of a certain contingency.
Deduction in respect of premium
A deduction under section 80C of the Act can be claimed in respect of the life insurance premium paid by the tax payer during a financial year (April 1 to March 31). The maximum deduction that could be claimed is restricted to the overall limit of Rs 1 lakh available under the said section. It should be noted that the deduction is available only to an individual or to the Hindu Undivided Family. In case of an individual, the deduction can be claimed in respect of the premium paid for life insurance for self, spouse and any child of such individual. In case of Hindu Undivided Family, the deduction can be claimed in relation to the premium payable on behalf of any member of the family.
Amount received on maturity or on death — not taxable As per the section 10(10D) of the Act, any amount received under a life insurance policy, including bonus paid on such a policy is exempt from income-tax, subject to specified conditions. However, the sum received under a key man insurance policy is taxable.
Similarly, any claim proceeds received from the insurance company by the dependent(s) /nominee( s) of the policy holder after his death is not taxable under the Income-Tax Act.
Caution Point
It is pertinent to note that any sum received under an insurance policy issued on or after April 1, 2003, in respect of which, the premium payable for any of the years during the term of the policy exceeds 20 per cent of the capital sum assured, is taxable. However, any sum received under such a policy on the death of the policy holder continues to be exempt from tax.
To Sum it up
As per media reports, it is quite ironical that on an average, people spend more money on their vehicle insurance rather than personal insurance. Probably, the reason is that vehicle insurance is mandatory while life insurance is not.
In case of individuals where they are the sole/main earning members of the family, life insurance should be the first and foremost financial investment that one should consider. In this context, term insurance policies, wherein for a reasonable premium, a large amount of life insurance cover could be taken, do provide a good avenue to financially de-risk the family in the hour of need.
Further, the tax benefits that one could avail should also act as the catalyst to encourage people to go for life insurance.
Source: http://economictimes.indiatimes.com/Personal-Finance/Insurance/Analysis/Give-life-insurance-top-priority-while-making-plans/articleshow/5532880.cms?curpg=1
Life insurance should form an integral part of an individual’s financial planning. It should be seen as a security that one can provide to his family to meet future uncertainty. The type of the insurance policy and the amount of the financial cover which an individual may choose is a matter of his personal choice and depends upon the number of factors including his age, future financial commitment, income level, etc.
Apart from the financial cover to meet future uncertainties, life insurance can also be looked at as one of the important tax-saving instruments on account of income-tax benefits available under the Income Tax Act, 1961 (The Act).
Income-tax benefits
The income-tax benefits in respect of the life insurance can be broadly classified under two categories. First, the benefit available in respect of payment of the life insurance premium and second, in relation to the amount received under a life insurance policy on maturity or on happening of a certain contingency.
Deduction in respect of premium
A deduction under section 80C of the Act can be claimed in respect of the life insurance premium paid by the tax payer during a financial year (April 1 to March 31). The maximum deduction that could be claimed is restricted to the overall limit of Rs 1 lakh available under the said section. It should be noted that the deduction is available only to an individual or to the Hindu Undivided Family. In case of an individual, the deduction can be claimed in respect of the premium paid for life insurance for self, spouse and any child of such individual. In case of Hindu Undivided Family, the deduction can be claimed in relation to the premium payable on behalf of any member of the family.
Amount received on maturity or on death — not taxable As per the section 10(10D) of the Act, any amount received under a life insurance policy, including bonus paid on such a policy is exempt from income-tax, subject to specified conditions. However, the sum received under a key man insurance policy is taxable.
Similarly, any claim proceeds received from the insurance company by the dependent(s) /nominee( s) of the policy holder after his death is not taxable under the Income-Tax Act.
Caution Point
It is pertinent to note that any sum received under an insurance policy issued on or after April 1, 2003, in respect of which, the premium payable for any of the years during the term of the policy exceeds 20 per cent of the capital sum assured, is taxable. However, any sum received under such a policy on the death of the policy holder continues to be exempt from tax.
To Sum it up
As per media reports, it is quite ironical that on an average, people spend more money on their vehicle insurance rather than personal insurance. Probably, the reason is that vehicle insurance is mandatory while life insurance is not.
In case of individuals where they are the sole/main earning members of the family, life insurance should be the first and foremost financial investment that one should consider. In this context, term insurance policies, wherein for a reasonable premium, a large amount of life insurance cover could be taken, do provide a good avenue to financially de-risk the family in the hour of need.
Further, the tax benefits that one could avail should also act as the catalyst to encourage people to go for life insurance.
Source: http://economictimes.indiatimes.com/Personal-Finance/Insurance/Analysis/Give-life-insurance-top-priority-while-making-plans/articleshow/5532880.cms?curpg=1
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