Term Insurance Tax Benefits Under Sections 80C, 80D and 10D

Term Insurance Tax Benefits under Section 80C

Under Section 80C of the Income Tax Act, you can claim a tax deduction of up to Rs. 1.5 lakh on premiums paid for your term insurance policies. Other tax-saving investments under section 80C include:

• National Pension Scheme (NPS)
• Public Provident Fund (PPF)
• Equity Linked Savings Scheme (ELSS)
• Employee Provident Fund (EPF) 
• Unit Linked Insurance Plan (ULIP)
• Atal Pension Yojana
• Voluntary Provident Fund (VPF)
• Senior Citizen Savings Scheme (SCSS)
• Tax-saving Fixed Deposits (FDs) in Banks and Post Offices 
• Sukanya Samriddhi Yojana (SSY), among others. 

What are the conditions to avail term insurance tax benefits under Section 80C

If you have a term insurance plan or are planning to purchase one and are wondering about the conditions to avail of term insurance tax benefits under Section 80C of the Income Tax Act, 1961, here are the conditions you must know:

• The annual premium paid towards life insurance (term insurance) should not exceed 10% of the actual sum assured. If it exceeds 10%, the deduction is calculated proportionately.
• For policies issued before March 31, 2012, the tax deduction is applicable only if the yearly premium does not exceed 20% of the sum assured.
• Keep in mind that if you voluntarily surrender or terminate a policy within two years from the date of purchase, you cannot claim a deduction on the premium payment.

Term Life Insurance Tax Benefits under Section 10 (10D)

Section 10(10D) of the Income Tax Act states that the money the designated person receives upon the policyholder's death is tax-free.

Term Insurance Tax Benefit under Section 80D

Under Section 80D of the Income Tax Act, term insurance policyholders with Critical Illness, Surgical Care, and similar coverage can also claim deductions. 

• You can claim up to ₹25,000 if the plan covers you, your spouse, and children below the age of 60. 
• If your parents are below 60 and you’ve taken an insurance policy for them, you can claim an additional ₹25,000 deduction.
• If your parents are above 60, the deduction goes up to ₹50,000.
• HUF (Hindu Undivided Family) members can also claim:
  • ₹25,000 if the insured members are below 60
  • ₹50,000 if the insured members are above 60

With the ACKO term plan, you can easily make any policy adjustments (endorsements) such as:

• Adjusting the Sum Assured or Policy Term
• Adding or modifying riders
• Updating nominee details and payout modes
• Changing personal details (address, phone number)

Raising claims, all via the mobile ACKO App.

You can also opt for the ACKO Life Critical Illness Benefit Rider to add more protection for your term insurance. The rider covers 21 critical illnesses, including life-threatening common illnesses among women, such as breast cancer, cervical cancer, fallopian cancer and ovarian cancer.

List of Covered Critical Illnesses

✔️ Cancer of Specified Severity
✔️ Open Chest CABG
✔️ Coma Of Specified Severity
✔️ Stroke Resulting In Permanent Symptoms
✔️ Permanent Paralysis Of Limbs
✔️ Multiple Sclerosis With Persisting Symptoms
✔️ Blindness
✔️ End Stage Lung Failure
✔️ Loss Of Speech
✔️ Major Head Trauma
✔️Third Degree Burns
✔️ Myocardial Infarction (First Heart Attack Of Specific Severity)
✔️ Open Heart Replacement Or Repair Of Heart Valves
✔️ Kidney Failure Requiring Regular Dialysis
✔️Major Organ /Bone Marrow Transplant
✔️ Motor Neuron Disease With Permanent Symptoms
✔️ Benign Brain Tumor
✔️ Deafness
✔️ End Stage Liver Failure
✔️ Loss Of Limbs
✔️ Primary (Idiopathic) Pulmonary Hypertension