It is often believed that the first step for efficient financial planning relies on the ability to save. Considering this, individuals often strive to discover ways in which they can reduce their tax liability. Purchasing suitable life insurance is one of the popular and risk-free ways to save taxes. A Term plan is among the easiest tax-saving instrument to understand.

Although a term life insurance policy is valuable for tax-saving, it is important to analyse different options to identify which one is the best term life insurance for you. The Indian Income Tax Act allows for numerous deductions and exemptions on the purchase of term insurance policy. However, a crucial element of efficient tax-saving is not making last-minute investments as policyholders often tend to miscalculate their insurance needs.

Take time to explore from among the best term insurance in India to find one that suits your financial and family needs.

What is Term Life Insurance Policy?

Before we enlist the tax-saving benefits of a term insurance policy, it is important to understand what exactly a term plan is. Term life insurance policy provides financial coverage for a specified “term” of years. If the policyholder were to die while the policy is active, a pre-determined death benefit is paid out to the nominee. Owing to a reasonable premium, term insurance is significantly less expensive as compared to investment or savings-based life insurance.         

Tax Benefits of Life Insurance Term Plan

There are several tax benefits that policyholders can avail with the purchase of a life insurance term plan. Both the premiums paid as well as the death benefits are exempted from taxes under the Indian Income Tax Act. Following are the benefits that policyholders can claim during the financial year:

Term Insurance Tax Benefits under Section 80(C) on Term Plan Premiums

According to Section 80(C) of the Indian Income Tax Act, 1961, a taxpayer is eligible for tax exemptions on the term plan premiums paid. The policyholder can claim a tax benefit for up to Rs. 1.5 lakhs every financial year.

However, there are certain clauses for deductions that insurers need to be aware of:

• If the term life insurance policy is issued on or after April 1, 2012, then tax deduction benefit is limited to 10% of the sum assured.
• If the term life insurance policy is issued on or before March 31, 2012, then tax deduction benefit is limited to 20% of the sum assured.
• In the event of disability, the tax benefit is increased by 15% of the sum assured if a policy has been issued on or after April 1, 2013.
• If the insurer voluntarily surrenders the term insurance policy within two years, no tax benefit is provided.

Term Insurance Tax Benefits under Section 80(D) on the Term Plan Premiums

This Section primarily allows for tax deductions on health insurance premiums. You can avail of a tax benefit under Section 80(D) if you have opted for health riders such as Critical Illness Rider, Surgical Care Rider, Hospital Care Rider, etc. By including these riders in the existing policy, insurers can maximise their tax benefit while also getting health insurance cover.

The clauses for deduction include:

• Tax benefit can be availed for not more than ? Rs. 25,000 if the policyholder is under 60 years of age.
• A higher benefit of ?50,000 can be availed by a policyholder above the age of 60.

Term Insurance Tax Benefits under Section 10(10D) on Term Plan Payout

The tax benefits of the term plan are not limited to the premiums paid but also the life cover payouts under Section 10(10D) of the Income Tax Act. The death benefit provided to the beneficiaries is entirely exempted from taxes.

Here are some clauses to remember:

• If the policy premium exceeds 20% of the actual sum assured, then the maturity amount is taxable. However, this is unlikely to happen as the sum assured is usually higher than the premium.
• If a handicapped dependent predeceases the member paying for his medical treatment and maintenance, then such amounts will be treated as income and taxed accordingly.

Important Considerations to Purchase the Best Term Life Insurance 

As term insurance is an income replacement in the absence of the bread-winner, it is important to carefully read the conditions of the term policy prior to purchase. Here are some things you must ask yourself for choosing the best term insurance in India:

When to Buy: Marriage or family planning are not the only reasons to buy term life insurance. It is important for anyone who has financial dependents. There is even a provision for buying term insurance for housewife wherein a husband can purchase one for his spouse. Edelweiss Tokio life insurance plan comes with a Better Half Benefit, wherein you can include your spouse in your policy and assure an additional life cover for your spouse when you are no longer around. 

The Cover Needed: There are several free tools available on the internet that help insurers calculate the right insurance cover based on their income and expenses. Edelweiss Tokio Life Insurance also offers a free term insurance premium calculator on their website to help you determine your term plan needs. Ideally, individuals should buy a life cover equal to at least 8-10 times the annual income.

Insurance Rider: Accidents or disabilities might impact the earning capacity of the policyholder. Riders like Accidental Death and Disability Benefit strengthen a term insurance policy by providing multiple additional benefits, over and above the base sum assured. 

Tenure: Insurers need to identify the right tenure of the life insurance term plan. A shorter tenure will lead to you being under-insured. However, a term plan coverage for a longer duration than needed will result in unnecessary term plan premium outflow. Determine the term plan duration based on the age by which most of your liabilities will be done, and you will have no need for income replacement-based insurance plans. 

Type of Plan: There are various facilities available under different term insurance plans in India. Insurers should review their needs every five years and make changes to their existing plan accordingly.

The best term plan is one that combines the aforementioned factors to suit the needs of the insurer. 

‘Zindagi Unlimited’ with Edelweiss Tokio Zindagi Plus

The Edelweiss Tokio term plan – Zindagi Plus is carefully curated to protect the financial future of your family and offers a customisable life cover with COVID-19 death claims. Conscious of the uncertainties of life, the Edelweiss Tokio Life Insurance Zindagi Plus plan offers an additional premium waiver on 35 critical illnesses and offers a non-medical underwriting option on life cover up to ?99,99,000.

Conclusion

Term insurance is the most seamless and affordable way of ensuring optimum financial protection for your family in your absence. Along with the extensive life cover, it also offers attractive tax benefits. However, make sure to go through the prevailing tax norms and understand if they apply to your policy before buying term insurance plans in India.

The global COVID-19 pandemic is one of the biggest crises the world has ever witnessed. During the pandemic, even the mightiest of the economies suffered huge losses, several businesses shut down, and millions of people lost their jobs or received a pay cut.

On the other hand, medical expenses continued to rise significantly. This has made one thing clear – you need to adopt a fail-proof financial planning process to ensure you survive such a crisis effectively.

One of the most important elements of the financial planning process is to create a supplementary income plan. Having a secondary income source can help you manage your expenses during financially crunched situations, such as job loss, significant salary cut, business loss, etc. The best way to secure an alternative source of income is by investing in a regular income plan.

Here is everything you need to know about the importance of a supplementary income plan with insurance in a post-pandemic world:

What is a regular income plan with insurance?

A regular income plan, also known as an online income builder plan, is a special type of insurance policy that gives you comprehensive insurance cover along with a regular income source.

This means that in case of your unfortunate demise during the policy tenure, the regular income plan will pay a defined lumpsum amount, in the form of a death benefit, to your family.

Apart from this, the plan gives you an option to receive your returns in the form of regular monthly income payouts during the course of the policy to supplement your primary income source.

What is the role of a regular income plan with life insurance in a post-pandemic world?

The COVID-19 pandemic has been raging on since 2020, leading to a rise in medical expenses and a loss of income for millions of people in India. The pandemic has redefined the need of financial security, and it is wiser for you to upgrade your financial planning process to include more up-to-date options like a regular income plan with life insurance.

Traditional insurance policies have always been an important part of a financial plan. However, the global pandemic has made the importance of insurance coverage even more pronounced. Especially, life insurance that also acts as a secondary source of income is ideal for dealing with the financial instability in and post the COVID-19 era.

Here are some of the top benefits of a regular income plan:

1. Protection: Coronavirus has caused millions of deaths, leaving several families financially struggling to keep up their standard of living after the loss of their primary breadwinner. However, with a regular income plan that also offers insurance protection, you can be at peace of mind, knowing that in case of an unfortunate event, your loved ones will not be financially strained.

The life cover payouts offered by the insurance policy will help them fulfil their living expenses and maintain their standard of living. Moreover, they could use the funds to achieve their financial goals, such as funding the education of your child, sponsoring the marriage of your children and more. Your family can also use the money to pay off any outstanding debts. 

2. Supplementary income source: Apart from causing a health scare, the COVID-19 pandemic has also led to a loss of livelihood for many. In such a scenario, having an alternate source of income always helps. With the regular income plan, you can opt to receive your insurance returns in the form of a lump sum or as regular payouts according to a frequency of your choice.

This helps you ensure that the pandemic does not financially crush you. In case you lose your job or experience a pay cut, you can use the regular income payouts to pay for your child’s education, meet healthcare expenses, pay your loan instalments, cover your everyday living expenses and do much more. 

3. Tax benefits: Apart from securing your family in your absence and helping you cope with the financial difficulties through a reliable income stream, a regular income plan also gives you tax benefits. The premiums you pay for the regular income plan are exempt from taxes under Section 80C. Moreover, the death benefit received by the family is also exempt from taxes under Section 10(10D).

Additionally, the regular income payouts that the plan offers also enjoy tax exemption under Section 10(10D). This helps you reduce your taxable income and ultimately your tax liability, enabling you to have more disposable income at hand.

Apart from offering these major benefits, you can also enhance the insurance coverage of your regular income insurance plan. Typically, these plans allow you to opt for riders, such as critical illness benefit, accidental total and permanent disability rider, income benefit rider, waiver of premium rider and more.

When you opt for a rider, such as a critical illness rider, you create a failproof financial plan for uncertainties like the COVID-19 pandemic. Such riders give you a lump sum benefit if you are diagnosed with a listed critical illness and also waive any further premiums. Moreover, the regular income stream helps your family cover their expenses while you are recovering from your illness.

Edelweiss Tokio Life Insurance Income Builder Plan

Trust Edelweiss Tokio Life online income builder plan to help you create a financial safety net for your future. The income builder plan offers comprehensive insurance along with an option to create a reliable supplementary income stream for uncertain times.

The plan comes with affordable premiums, competitive features, utmost flexibility, tax benefits and a wide variety of riders, enabling you to create a strong financial shield for the post-pandemic world.

Conclusion

The global pandemic is a wake-up call for everyone to realise the importance of financial planning. Choose the best regular income plan that can provide you with the much-needed supplementary income as well as a secure insurance cover for your family.

It is wiser to be prepared for all types of uncertainties in the post-pandemic world, with Edelweiss Tokio Life – Income Builder.

Several investors live in the dark that SIP and mutual funds are quite replaceable. What they fail to realise is that Systematic Investment Plan, commonly known as SIP is barely a method available to investors that helps them to invest in mutual funds. However, did you know that there’s one more way through which you can invest your money in mutual fund investments?

Yes, you heard us right. There are two ways to invest in mutual funds – either through regular and disciplined mode of investment through SIP or one-time investment through lumpsum investment.

Though there is loads of information about SIP investment on the net, not much is covered about the lumpsum mode of investment. One such important yet often overlooked piece of information is determining the right time to make a lumpsum investment in mutual funds. Don’t worry, we have got you covered. In this article, we will understand the right time to invest a lumpsum in mutual funds. But, first let’s quickly recall what lumpsum investment is.

What is a lumpsum investment?

Under lumpsum mode of investment, an investor delegates a substantial amount of money towards mutual fund investments at a time.

This mode of investment is suitable for investors who have a sudden and substantial influx of cash in their bank account or have a huge amount of idle cash lying around. The influx of cash could be in the form of anything – sale of assets, money received after retirement, winning a lottery, tax refunds, court settlements, gift, inheritance, or literally anything else.

When is the correct time to make a lumpsum?

If you are looking to make an investment in equities, lumpsum mode of investment might not be the suitable way of investing for you. This is because experts believe that with equity investments, it is better to stagger your investments – as in the case of SIP investment. When an investor invests a lumpsum in mutual funds, they expose their portfolio to certain uncertainties and volatilities associated with the stock markets.

There’s one important parameter when it comes to investing in mutual funds through lumpsum mode of investment – timing the markets. During this time, an investor’s main goal should be safeguarding their capital. The lumpsum mode of investment is believed to offer best results when the stock markets are on a rise. Also, you might consider investing in debt funds when you wish to make a lumpsum investment. If you wish to evaluate the future value of your lumpsum investments, you might want to use a lumpsum calculator.

As you might know, there are certain risks associated with investing a lumpsum in mutual funds. If you do not wish to expose your investment portfolio to these risks, you might consider delegating your risk through STPs – systematic transfer plan. STPs help investors to systematically transfer their funds in a disciplined way from one asset class to another.

Happy investing!

Life is uncertain, and while it is not possible to prepare for all the unexpected events ahead, it is feasible to create a financial safety net. Our latest term insurance product – Edelweiss Tokio Life Total Protect Plus can be a part of efficient financial planning.

When you invest in a term plan, you are at peace knowing that in case of your unfortunate death, your loved ones will be financially secure. But when you buy an online term insurance plan, you must compare term insurance plans before making the final decision.

Know how you can provide total financial protection to your family with the Edelweiss Tokio term life insurance:

What is the Edelweiss Tokio Total Protect Plus plan?

The latest term plan, Edelweiss Tokio Total Protect Plus, offers an assured sum in case of your unfortunate death during the policy tenure. The plan offers whole life cover of up to 100 years of age. This term insurance is a protection plan that offers a predetermined sum assured to your family in case of your death, along with other optional benefits.

The plan is not affected by the movements in the market, which makes it an ideal choice for you to create an infallible financial plan for your family.

The sum received from our all-new term plan can help your loved ones navigate the financial struggles of their life when you are not around. They can use the money to pay for their everyday expenses and maintain their standard of living. Moreover, the term insurance benefits also help them achieve their financial goals, such as higher education for your children, buying a home, and so on.

Edelweiss Tokio Total Protect Plus is an all-inclusive term insurance policy, where you get comprehensive protection for you and your family under a single plan. It offers financial coverage for the spouse as well as the child. Additionally, you can get life cover for up to 100 years of age, thus ensuring long-term security. Finally, with the choice of 5optional riders, you can enhance your policy coverage to the next level!

Here are a few reasons why you should choose this online term insurance plan.  

• Financial protection with life cover: As a primary breadwinner of the family, your family is financially dependent on you. In case of your unfortunate demise, your loved one might be left to struggle financially. However, when you invest in the Edelweiss term plan, you can be assured of the financial security of your loved ones even in your absence. The term life plan pays out a defined sum to your nominee, in case of your demise during the term insurance tenure.
• Coverage up to 100 years of age: With this plan, you can choose a whole life cover to ensure extensive protection for you and your loved ones. Most liabilities of individuals are over by the time they retire, and their children become independent. However, with a whole life cover, you can ensure a sizeable financial inheritance to your family in case of your demise.
• Optional benefits to enhance coverage: The Edelweiss Tokio term plan allows you to improve your term plan coverage by opting for additional features such as Child’s Future Protect Benefit and Better Half Benefit. 
  • Child’s Future Protect Benefit: You can opt for this optional feature if you have a child between the age of 0 and 18 years. This benefit offers an additional sum assured to the child, which can be 10% to 100% over and above the base sum assured, for securing their growing years. The additional sum will be paid if the life assured passes away within the tenure of the Child’s Future Benefit option, which can be either the selected period or till the child turns 25 years of age, whichever is earlier.
  • Better Half Benefit: You can cover your spouse in the same plan through the Better Half Benefit option. The benefit of this policy will come into force only after your demise. In such a scenario, the base sum assured will be paid to the spouse covered under the policy. Additionally, life cover will commence on the spouse without any liability to pay future premiums. The Better Half Benefit Sum Assured is 50% of the base sum assured, which will be payable on demise of the spouse. 
• Attractive discounts on premium:  Apart from being a term plan with affordable premiums, the Edelweiss Tokio Life – Total Protect Plus policy also reduces your premiums by offering you discounts. You get 6% discount on your first-year premium if medical tests are completed within 7 days from the date of purchase or login. 
  Additionally, female policyholders get discounts on their term plan premiums. All policyholders can get discounts on the total premiums if they opt for a high sum assured.
  Economical premiums and discounts make it easier to buy comprehensive coverage for your family, enabling them to stay secure even in your absence.
• Riders to enhance protection: You can further enhance the coverage of the policy by choosing from a list of five (5) unique riders:
  • Edelweiss Tokio Life Waiver of Premium Rider: This waives off all future premiums if the life assured is diagnosed with any one of the listed critical illnesses or has met any accident or permanent disability.
  • Edelweiss Tokio Life Accidental Death Benefit Rider: This rider offers additional sum assured to the nominee if the life assured’s demise is due to an accident.
  • Edelweiss Tokio Life Accidental Total and Permanent Disability Rider: This rider pays a lump sum amount if the life assured gets into an accident and suffers total and permanent disability.
  • Edelweiss Tokio Life Critical Illness Rider: If the life assured is diagnosed with any one of the 12 listed critical illnesses, this rider will pay out a pre-specified lump sum amount.
  • Edelweiss Tokio Life Hospital Cash Benefit Rider: With this rider, get monetary allowance on hospitalisation and a lump sum amount as a recuperating benefit post discharge.
• Tax benefits: The premiums you pay for the Edelweiss Tokio Life Total Protect Plus policy are covered under Section 80(C). Further, the death benefit received by your nominee also benefits against taxes under Section 10(10D) of the Income Tax Act, 1961.
• Free look period: We offer transparent guidelines and a free look period wherein you can cancel the term life insurance within 15 days from the receipt of the policy documents. For electronic policies and term plans obtained through distance mode, you can cancel the policy within 30 days.

When you buy a term insurance plan you are essentially buying your peace of mind. The Edelweiss term insurance plan, Total Protect Plus, assures you that your loved ones will be financially protected even if you are no longer around.

As a parent, holding your child in your arms is the most precious feeling. You want to do everything in your power to protect them and keep them secure. Unfortunately, life is designed in a way that you cannot always be there to safeguard them in the future. Therefore, it is wiser to have a plan in place to protect them, especially when you’re not around.

Your children depend on you for their needs and even their future goals. In your absence, they might have to suffer both emotionally and financially. Without a proper source of income or a financial cushion, your children might have to compromise on their standard of living and even give up their life dreams. The emotional impact of losing a parent can subside over the years, but the monetary impact of losing a breadwinner can leave them distressed or leave them struggling over a longer time. 

Amidst the fast pace of this life, rising uncertainties and the ever-changing dynamics, it is critical that your spouse and children have a reliable financial backup to secure them financially in your absence. For this purpose, you can consider investing in a comprehensive term insurance plan. 

Know how can a term plan provide total protection for a child’s future:

What are term plans, and how do they protect your child’s future?

Term insurance policies are pure life insurance plans that pay out an assured benefit to your nominee in case of your unfortunate demise during the plan tenure. When you buy term insurance, you can easily secure the future of your child from being jeopardised by the financial struggles they would otherwise face because of the loss of income.

A term policy is one of the most reliable insurance policies because it does not have an investment component and remains unaffected by the volatile movements of the market. Your children have the freedom to use this money to pay for their regular expenses, maintain their standard of living or even accomplish long-term financial goals like pursuing higher education. 

The all-new Edelweiss Tokio Term Plan – Total Protect Plus gives you an additional and optional benefit to enhance your term life insurance coverage by selecting Child’s Future Protect Benefit. This benefit gives you the freedom to increase your life cover, on opting for an additional sum assured from 10% to 100% of the base sum assured, if your child is between 0 and 18 years of age. This term plan for parents allows you to create a wider financial safety net for your child. 

What are the benefits of a term policy?

If you buy online term insurance, you are essentially investing in your peace of mind. This term plan for parents acts as a reliable financial security instrument for your little one.

Here are some top benefits of a term policy:

• Financial security: Term insurance secures the future of your child by providing them with guaranteed financial aid in the event of your passing. Terms plans guard your children and dependents, such as your spouse, against having to take on any financial burden. The money can be used by children to pay off any existing debts, meet their living expenses and even pay for their education or set up a business. The term policy benefit can be a lump sum or regular monthly income. 
• Reasonable premiums: Term insurance plans are one of the most cost-effective and affordable life insurance policies. These plans offer wide sum coverage at a fraction of the term insurance premium as compared to other similar plans. If you have a high sum assured, good term plans also give you discounts on term insurance premiums. Affordable term insurance premiums and discounts make it easier for you to buy comprehensive coverage, thus providing a significant corpus for your children. Female lives covered also involve lower premium costs.
• Flexibility: Sound term plan for parents give you higher flexibility. These term insurance policies allow you to choose coverage as per your requirements. You also have the freedom to define your policy term, which could be aligned with your child’s education years. Further, you can customise your premium payment frequency (annual, semi-annual, quarterly, monthly) and death benefit mode (lump sum, monthly income, lump sum plus monthly income) to suit your child’s financial needs.
• Tax benefits: When you buy online term insurance, the premiums you pay for your term policy are exempt from taxes under Section 80(C). Additionally, the death benefit received by your child in case of your unfortunate demise during the term policy tenure is also tax-free under Section 10(10D) of the Income Tax Act, 1961. This allows you to take advantage of tax benefits in the present as well as not burden your children with tax liabilities in the future. 

Overall, a term policy is a recommended protection plan that you can use to protect your child. It is a legacy you can leave for your family that can cater to their needs. You can have peace of mind knowing that your children can live a financially sheltered life even if you are no longer around to support them.

As a parent, investing in a term plan for parents is a wise choice that you should make as soon as your child is born. Investing early on gives you the advantage of getting lower premiums, high sum assured, better discounts and an extended security period. 

However, with so many online term insurance plans available, it is vital that you conduct in-depth research and choose the best term policy as per your needs. Get your term insurance quotes, know the policy terms and conditions, inclusions and exclusions, as well as term insurance premium affordability, before you make the final decision. 

The choices you make today can significantly impact the future of your children. So, take the right step in the right direction, with Edelweiss Tokio Life – Total Protect Plus and Child’s Future Protect Benefit option!