Every person needs to buy a life insurance plan to secure their lives. However, the person buying the insurance must pay premiums every month. An insurance premium is defined as the money that is charged by an insurance company for their coverage. However, disparity arises when the premiums actually charged is different from insurance premiums that are quoted. This difference between the actual charge and the quote is determined by the premium calculator. Do you know how the insurance premiums that are charged by an insurance company are determined? The process is done by using a premium calculator. A premium calculator is used to determine the mathematical and statistics calculations that are actually carried by the underwriting department of any insurance company. How the premium determined using the Premium Calculator?
Every life insurance company has a premium calculator that helps them to calculate the premium for an insurance policy with maximum ease. The best part is that you can use the calculator to assess your premium rates online without any hassle. If you are in your thirties, you should be more aware of your finances and even think of purchasing a life insurance plans. Use a life insurance calculator so as to assess an appropriate premium and also the cover amount. Are you in your early 30s? Then start thinking fast of the following: What you should do regarding financial planning as step in your 30s?
With age comes new responsibilities and a life insurance stands a good chance to secure your future and even of those mentioned in the policy after your demise.
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Tax benefits against premiums paid for life insurance policies can be claimed under Section 80C of the I-T Act of 1961. These benefits are an added advantage to a life insurance policy holder. To claim these benefits, he needs to be aware of all the aspects of it.
Life insurance policy is advantageous as it gives protection cover, long-term savings and acts as an effective tax planning tool. Life insurance taken from LIC of India are not the only policies eligible for tax deductions. All life insurance policies taken from companies registered with IRDA, whether public or private, are applicable for these deductions. Let us examine these tax benefits in detail. Deductions Under Section 80C Deductions under Section 80C are available to individuals and HUFs. Total combined exemption from tax amounts to ₹150,000 under Sections 80C, 80CC, and 80CCE. There is a limit to the deductions made for the paid premium in a financial year. The total premium paid that will be exempted from tax in the financial year should be less or equivalent to 20% of the sum assured. As of April 1, 2012, the amount of deduction has been reduced to 10% of the assured sum on all life insurance policies furnished on and onwards from April 1st, 2012. For all life insurances issued on or beyond April 1st, 2013, for an individual with specific ailment, as pre-defined under Section 80DDB, or severe disability, as per Section 80U, the maximum allowed deduction is 15% of the sum assured. Remember:
Deductions Under Section 80D Tax benefit under Section 80D is applicable for individuals and HUFs. Maximum allowed deductions under this section are:
Maximum deduction can include expenses incurred towards preventive medical check-ups, conditioned to the fact that these expenses do not exceed ₹5,000. In case there are no life insurance plans for super senior citizens (aged 80 and above), any medical expense not exceeding ₹30,000 can be claimed for tax deductions. Deductions Under Section 80DD
Exemptions Considered Under Section 10(10D) Any funds received from the life insurance policy in the form of death benefit, survival benefit, maturity value, surrender value, or bonus, all qualify for deductions under Section 10(10D). Any gains or proceeds from ULIP to fall under this category. Exemptions under Section 10(10D) are:
Remember There is no limit to the amount allowed as maximum deduction under Section 10(10D) and the above-mentioned conditions are not applicable on funds received on demise of the insured or death claims. |
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