New Delhi India, May 22: Good financial planning involves growing your money while also protecting your family. While investments help you save and earn more through returns, term insurance makes sure your loved ones are financially secure in case you are no longer there to provide for them. Choosing the best term insurance plan for 2 crore not only provides solid protection for your family but also helps you save on taxes, making it a smart move for long-term planning.
Term Insurance Tax Benefits
Term insurance tax benefits help you save money while securing your family’s financial future. The tax benefits include:
• Section 80C Deductions: Under Section 80C, you may claim a deduction up to ₹1.5 lakh every year for premiums you have paid. Other Tax-saving Investments under Section 80C include Employee Provident Fund (EPF), Voluntary Provident Fund (VPF), Home loan principal repayment and Senior Citizen Savings Scheme (SCSS).
• Section 10(10D) Exemption: Under Section 10(10D) of the Income Tax Act, the death benefit received from a term insurance policy is tax-free for the nominee, provided certain conditions are met.
• Rider Premium Benefits: If you add riders like critical illness or surgical care to your term insurance, the premiums you pay for these extra covers can help you save more on taxes. Under Section 80D of the Income Tax Act, you can claim deductions up to ₹25,000 for yourself, and if you have a plan for your parents who are over 60, that limit goes up to ₹50,000.
Choosing the Best Term Insurance Policy for 2 Crore Coverage
When selecting your option, keep the following factors in mind to make an informed decision:
• Premium Affordability: Premiums may differ among insurers since they consider factors such as age, health, lifestyle, and occupation. However, purchasing insurance early tends to result in lower premiums for the entire period, which is a wise decision.
• Rider Benefits: Most insurers offer optional riders or add-ons to enhance your protection. Some popular riders are critical illness coverage, accidental death, or permanent disability income. Although they cost a little extra, they provide additional peace of mind and greater protection against various life circumstances.
• Flexible Policy: A flexible-term policy allows you to select protection that suits your life stage and responsibilities. Certain plans also enable you to boost your life cover after milestones like marriage, having a child, or availing a home loan without undergoing new medical examinations. In this manner, you can continue to enjoy tax benefits and financial security. Additionally, check if the plan has convenient renewal or conversion options, like converting your term plan to a whole life or endowment plan without new medical tests.
• Customer Service and Online Facilities: It’s important to pick an insurer that’s there for you when it counts. When you are handling your policy, paying premiums, or making a claim, seamless online facilities and prompt support can actually make the entire experience better. Also, look at the insurance company’s Claim Settlement Ratio (CRS) while choosing the optimal plan that is suitable for you.
Additionally, before finalising your plan, use a term insurance calculator to estimate coverage and premium based on your financial needs. This will help ensure that your chosen plan offers adequate protection without stretching your budget.
Conclusion
A ₹2 crore term insurance plan offers your family financial protection and potential tax benefits. To get the best plan, look for one that offers reasonable premiums, useful features, and applicable tax benefits. Choosing an insurance provider with strong financial stability, transparent terms, and a high claim settlement ratio gives you confidence that the policy will support your family as intended.
