Are you under the impression that insurance must be bought only when you perceive some loss to your tangible or intangible assets? Do you think that one should invest in insurance only after the late 30s and 40s, before which it is just a waste of money? Do you think that buying and investing in insurances is the job of your parents, and you need not worry about it until you are actually married and are thinking about retirement? Well, if you have agreed to most of the questions above, hold on to those thoughts and think again!
Gone are the days when people used to think as aforementioned. Today, insurance plays a major role in securing the future of an individual and is also a smart way to invest and avail tax benefits.
Wondering why and how an LIC term plan can avail tax benefits? Well, the logic is simple. One pays income tax on the income earned. After paying taxes, the amount that is leftover is called savings. It is assumed that an individual opts for insurance only and only if he/she has enough savings left to invest. Hence, when premiums are paid, the Government is generous enough to not levy any further taxes on the same. The premiums paid for LIC Term Plans are eligible for tax deductions under section 80 C of the Income Tax Act, 1961.
LIC term plans are a great way to secure the future of loved ones. Below are some of the best LIC term plans that one can choose from:
- LIC E-term plan: It is a pure term plan which is generally for 10 to 35 years of tenure. A medical examination is required before one signs up for this term plan. The minimum sum assured of Rs. 25 lakhs for Aggregate category and Rs. 50 Lakhs for Non-smoker category. There is no limit on the maximum assured. The minimum entry age is 18 years and the maximum entry age is 60 with maximum cover ceasing age being 75 years.
- Anmol Jeevan II – The minimum sum assured is Rs. 6 lakhs and maximum assured of Rs. 24 lakhs. The policy terms available are 5 years to 25 years. The minimum entry age is 18 years and the maximum entry age is 55 with maximum cover ceasing age being 65 years.
- Amulya Jeevan II – The minimum sum assured of Rs. 25 lakhs and no limit on the maximum assured. The policy terms available are 5 years to 35 years. The minimum entry age is 18 years and the maximum entry age is 60 with maximum cover ceasing age being 70 years.
Easy Tips to buy Term plans
Wondering how to identify the best term plan? Well, consider the easy tips mentioned below to buy a term plan:
Consider the amount for which you want to insure: This is the first step you must consider, as this will help decide on the following LIC term plan, duration, etc.
The financial status needs to be considered: The financial status of the family in the present and in future also needs to be considered. How much will the family need, maintain the basic lifestyle, in the case of one’s absence? This question will help fix the premiums and other benefits.
Does one have any other liabilities? This question cannot be ignored. It is important to make sure that one is paying the LIC term plan premiums on time so that one does not enter the defaulters’ list when it comes to payment of premiums. Considering other liabilities will help decide on this factor.
Choose the right term plan
While choosing the best LIC term plan, it is important to look at the bigger picture. Now, what does this mean? Look beyond the current basics and lifestyle. While choosing the right term plan, consider the future changes, and needs of the family that may arise and how they can cope with it, in your absence. If need be, you can always consult financial experts before choosing the right term plan. These experts research on term plans and hence will be able to offer the best advice on when to opt for a term plan, why to opt for a term plan and how to go about investing in a term plan. Yes, and if you are still hesitant, just start by choosing one of the plans mentioned above on Coverfox.com.