Human life is unpredictable and thus a person need to plan about his future as there may be a loss of income to the household. An individual can protect himself or herself against such contingencies through life insurance. Though Human life can not be valued but it is always better to have protection against uncertainties in life & protection required can be reached through loss of future cash inflows.There are different types of life insurance product which not only provides protection but also return on money invested in such policies.

TERM INSURANCE

Term insurance plans are pure form of insurance. It is low-cost insurance that is valid only for a stated period of time and has no cash surrender value. You can avail high insurance with very low premiums. Some insurance companies have also come up with Term Insurance policies with premium return features to make these plans more attractive to customers.

LIFE INSURANCE

An endowment policy is a combination of insurance and investment. Under a plain vanilla endowment plan, the policyholder pays regular premiums for the policy term. If the policyholder dies during the policy term, the nominee gets the death benefit i.e. the sum assured and accumulated bonuses. On survival, the policyholder gets a survival benefit, including vested bonus and terminal bonus, if any.

Health Insurance

Health Insurance is a type of insurance that covers the medical expenses of the insured due to an illness or accident in exchange for a premium amount. It enables the insurance company to provide medical coverage for hospitalization expenses, day care procedures, critical illnesses, etc. A health plan also offers multiple benefits, including cashless hospitalization and free medical check-ups.

Tax benefits

  • The premium paid is eligible for tax deductions under Section 80(D) of the Income Tax Act 1961. 
  • Health insurance purchased for the spouse, children, and the insured, can avail of up to Rs. 25,000 tax deduction.
  • Health insurance that also includes parents below the age of 60, can avail up to an additional Rs. 25,000 tax deduction, making the total tax savings Rs. 50,000.
  • Health insurance that includes parents above the age of 60, can avail total tax savings of Rs. 75,000.
  • A further deduction of Rs. 5000 goes towards the payment of preventive health check-ups for the insured, the parents, spouse and children.