Term Insurance Tax Benefits Under Section 80D

A range of deductions and exemptions are available under the various sections of the Income Tax Act to help you save money on taxes. Investing in a wide range of instruments that qualify for these deductions and exemptions is available to taxpayers. Term insurance is one such tax-saving tool. Aside from the tax benefits of term insurance, policyholders also receive solid life insurance coverage for their families and can live a stress-free life in the long run.

What is a Term Insurance Plan?

A term insurance plan lasts for a set period of time and provides you with a substantial sum assured at a reasonable premium charge. The sum assured is payable to the policyholder's nominee if the policyholder dies during the policy period. You will not receive any maturity benefits if you survive the term policy, but you will have assured that your loved ones are protected by purchasing a term insurance policy.

Term insurance also has other advantages. It is both cost-effective and essential for people of all income levels. It also allows you to boost coverage when you reach a new life stage, such as marriage or the birth of a child, without having to undergo any further medical exams, as long as you meet the term plan's terms. Then there's the added benefit of term insurance riders, which may be purchased for a small fee.

Term Insurance Tax Benefits Under Section 80D

This Section has traditionally been used solely for health insurance coverage. It provides a tax deduction for health insurance coverage purchased for yourself, your spouse, your children, or your parents, with varied deduction limitations depending on the circumstances.

Certain term plans, on the other hand, can take advantage of Section 80D tax benefits. Deductions are available to policyholders who have added a health-related rider to their term insurance policy (such as Critical Illness, Surgical Care, or Hospital Care Rider). The following are the conditions for the term insurance benefit 80D.

• Section 80D deductions are available for amounts up to Rs. 25,000.
• Additional deductions of Rs. 25,000 are available if you have purchased an insurance policy for your parents.
• The deduction limit increases to Rs 50,000 if your parents are senior citizens.

Take Away

Term insurance is a pure protection plan that is designed to secure your loved ones' futures and ensure that the family's life goals are accomplished. Under Sections 80C and 10(D) of the Act, you can deduct term insurance premiums from your taxes, and your nominee/family can claim death benefit exemptions. In addition, the Act's Section 80D allows you to claim tax benefits for certain riders purchased to cover medical expenses related to serious diseases or impairments. Getting term insurance coverage can be a fantastic gift for your loved ones, so you must take full advantage of it.

Also read: Can I Claim Term Insurance Tax Benefits Under Section 80D?

Make the Most of Your Term Insurance Plan with Its Tax Benefits

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.