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Section 80D of the Income Tax Act - Life Insurance

Neviya LaishramNov 4, 2025

Life insurance policies also offer tax benefits under Section 80D of the Income Tax Act, but this applies only to health-related riders added to your policy. While the main life insurance premium is eligible for deductions under Section 80C, the cost of health add-ons, such as the Critical Illness Rider, Hospital Cash Rider, and Surgical Care, among others, qualify for a deduction under Section 80D.

Contents

Key Takeaways
What Deductions are Allowed under Section 80D?
Section 80D Example: How Much Tax You Can Save on Life Insurance Riders
Why Section 80D Matters for Life Insurance Policyholders
Conclusion
FAQs on Section 80D of the Income Tax Act

Key Takeaways

The tax benefit under Section 80D is separate from the deduction available under Section 80C of the Income Tax Act.
Only the portion of the premium allocated for the health-related rider within your life insurance policy is eligible for the deduction under Section 80D.
This benefit helps reduce your taxable income, allowing you to save more on taxes each year.
It also offers higher deduction limits if you’re paying premiums for yourself or your senior citizen parents.

What Deductions are Allowed under Section 80D?

The deduction limit depends on the insured persons’ ages. Here’s how the deduction limits work for life insurance:

Category	Age Group	Deduction Limit
Self, spouse, and children	Below 60 years	₹25,000
Parents	Below 60 years	₹25,000
Self, spouse, and children	60 years or above	₹50,000
Parents	60 years or above	₹50,000
Members of a Hindu Undivided Family (HUF)	Below 60 years	₹25,000
Members of a Hindu Undivided Family (HUF)	60 years or above	₹50,000

Section 80D Example: How Much Tax You Can Save on Life Insurance Riders

Let’s say you’re 35 years old and pay a premium that includes a health-related rider for yourself, your spouse, and your children. You can claim up to ₹25,000 as a deduction under Section 80D.

If you also pay for your parents’ health-related rider premiums, and they are above 60 years old, you can claim an additional ₹50,000. So, in total, you can claim a maximum deduction of ₹75,000 (₹25,000 + ₹50,000) under Section 80D.

Why Section 80D Matters for Life Insurance Policyholders

Section 80D is important for you as a life insurance policyholder because it provides an additional tax deduction beyond Section 80C. Since it allows deductions on the premium you pay for health-related riders, it can help maximise your tax savings while protecting your family’s health.

Conclusion

Section 80D is a valuable benefit for taxpayers that encourages them to invest in life insurance and health care. While it primarily applies to health insurance, the health rider aspect of life insurance policies is also eligible for this deduction.

By understanding and using the provisions of Section 80D, you can ensure financial and medical protection for your family while reducing your overall tax burden.

FAQs on Section 80D of the Income Tax Act

Below are some of the frequently asked questions on Section 80D of the Income Tax Act - Life Insurance

Is Section 80D applicable to all life insurance plans?

No, Section 80D is limited to health-related riders within a life insurance plan, such as Critical Illness, Hospital Cash, or Surgical Care riders.

What are the term insurance tax benefits?

Term insurance offers tax deductions under Section 80C on premiums paid and under Section 10(10D) on the payout received by nominees. If your plan includes a health-related rider, you can also claim benefits under Section 80D.

How can I maximise term insurance tax benefits?

You can include eligible riders, such as health or critical illness coverage, in your term plans to maximise tax benefits. However, you must pay your premiums on time to claim deductions under both Sections 80C and 80D, where applicable.

Can I get term insurance tax benefits if I stop paying the premiums?

No, it is essential for you to understand that you can only claim tax benefits while your policy is active.

Can I claim life insurance under 80D?

Yes, you can claim under Section 80D, but only for the premium that covers health-related riders in your life insurance policy. The base life cover premium is eligible for a tax deduction under Section 80C of the Income Tax Act.