Tax savings by introducing Life insurance
Does life insurance really save tax? When ever you pay premium, company already collected tax on the premium. I think it is just an eye wash to save tax. What is your opinion? more
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In fact life insurance is to be seen as a secured measure for family after insured person's death. It is an instrument for family protection in case of any unfortunate event. Tax saving is an additional feature for it to encourage people. If we calculate interest on premium paid, it may be high, but if you calculate benefit in case of sudden death of family earning person the benefit will be high based on period of payment. it cannot be seen as a tax saving instrument, but see it as a family benefit, more
Jun 12
Life Insurance is not money saving device.It is useful only in case of casualty at an early age. more
Jun 10
Life insurance is not an investment but a safeguard against an unfortunate event - please do not mix the two. You do get 80C deduction for life insurance premiums but that should not be the primary purpose of taking life insurance. more
Jun 07
You are right and I hold the same opinion. Now, my domestic help holds two policies, one in the name of her husband and one in her own name while she is not an income tax payee: what is the advantage of 80C deductions to her? more
Jun 07
In fact it is the misleading advertisements of IRDA that tries to entice consumers by asking them to save on tax by purchase variety of insurance products. In fact, I also feel your calculations " I once calculated the loss was about 20 Lacs in 20 year plan for 50K annual premium." to be correct. My domestic help recently came up with a complaint that through monthly premium, she is losing too much of the money as after some 20 years she would be getting nothing but her own money back and that too not with the expected interest whereas if she had deposited that much of money in some bank deposit she would be getting something like a crore at the end of 20 year plan. I would like suggest the Advertising Standards Council of India to study the misleading advertisements of IRDA/Insurance Companies, and educate consumers on it. more
Jun 07
Better not to mix tax saving with Insurance or Investment with Insurance. Both are different things. Dont try to serve both purpose with one. You will loose a lot of money. I once calculated the loss was about 20 Lacs in 20 year plan for 50K annual premium. Best tax saving is ELSS as it has only 3 years locking. If you are not comfortable with market then you can take PPF (15 year Lockin). The only problem with long lockin periods we will not be able to access our money. Maybe not in out life time. Many times family dont know where we have invested. Also getting money back after the death will be troublesome for family members. These are my personal views. more
Jun 07
