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Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.
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Term policies are pure life covers that act as an excellent way to protect the financial stability of your loved ones. Having term insurance is not just beneficial to secure the financial stability of your loved ones in your absence. Term insurance also offers tax benefits and is a good tax planning tool.
These types of life insurance plans provide the benefits to your nominees in case of your demise during the policy tenure. However, term policies have no survival benefit, unlike regular life plans.
The Income Tax Act, 1961 offers policyholder tax benefits under section 80C along with the deductions of INR 1.5 lakh. Furthermore, you may avail of exemptions under section 10(10D) of the Income Tax Act, 1961 for any maturity benefits received under the term policy.
Individuals and Hindu Undivided Family (HUF) taxpayers may claim the following benefits under section 80C.
You may also avail of tax benefits under section 10(10D) of the Income Tax Act, 1961. Any amount you receive from your insurance policy including bonus is exempt from taxes. However, there are certain exceptions to this rule as listed below.
In case you pass away during the policy term, your nominees will receive the benefits as per the terms and conditions. The death benefits paid through term insurance plans are not taxable in the hands of your nominees. However, if the policy was purchased after 1st April 2003, you will not be able to claim benefits under section 10(10D) of the Income Tax Act, 1961 in case the premium amount exceeds 20% of the sum assured.
Term plans are an important component of a strong financial plan. It is one of the easiest and most affordable ways to achieve financial stability in case of your demise.
Kotak term insurance plans are available at affordable premiums enabling you to acquire higher coverage for a lower outflow. Most experts will advise you to include a term policy in your overall financial plan. Furthermore, the tax benefits available under the Income Tax Act, 1961 make these policies more desirable. These plans not only offer death benefits to your nominees but also help you reduce your tax liability. If you still haven’t purchased one, avail one today!
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