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Showing posts with label Insurance Premium. Show all posts
Showing posts with label Insurance Premium. Show all posts

Can I Change My LIC Agent ?

One of my client ask me that their LIC agent is not cooperating / assisting to them if he is in need of any query of help, so transfer my policy under your agency name. I told them it is not possible right now because LIC has not provided Agent Portability. So if you are in need of any assistant tel me if I can do so.

During the time of buying the policy, all insurance agent claims big promises like they always take care of your policy, any other services related issue or ready to serve you in case of sudden demise of a policyholder. But the reality is little different. There are many reasons for that. One of them are mostly agent do this profession as part time job. Hence all agent not committing full time to their service. And this may be possibly that policy holder may not get proper service from their agent. 

Majority of Insurance agents does not care for after sales service however, few of them take care of their clients with a hope for further policy or references. 

LIC agent is a salesman who just acts as an intermediate between the customer and LIC of India. Once the plan is sold by the agent to the customer, then you are only a customer of LIC of India and the agent has no liability towards you. So, if your agent is not assisting you in depositing LIC Premium, or some other help then you can not do any thing. 

The only exception is being that if a plan is sold to you with improper information you can withdraw your insurance policy within 15 days.

As of now there are no such rules set either by Insurance Companies or from IRDA regarding change / port of Agent.

But if your agent has died then you can write an application to the branch and ask them to assign your policies in the name of your new agent. But it is possible only if your policy becomes an Orphan Policy

The policy (ies) initially effected by an Individual Agent whose services were subsequently terminated or removed from LIC are qualified as Orphan Policy (ies) and are qualified as Orphan Policy for the purpose of Agent Portability Rules. Except the policies whose effecting agent is entitled to renewal commission under section 44 of the Insurance Act , 1938 and The policies falling under proviso of Rule 10 (4) of LIC of India (Agents) Rules, 1972.
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How to Avoid Insurance Claim Rejection ?

Life insurance is not just a tax saving tool, it is a serious financial product which if used correctly can be a bless for your family and dependents. We people take life insurance to safe our future from any mishappen.      
How-to-Avoid-Insurance-Claim-Rejection ?
But it will be only if it get paid to our nominee on time without hassle. There are so many clauses, conditions and exceptions in insurance policies. Failure to meet any of these conditions would result in no insurance benefit being pay out. Most often, insurers rely on legal loopholes and clauses in their policy documents to avoid making payments of sums assured, but surprisingly a large number of times, the fault and blame belongs to the customers themselves.
Here are some points to ensure yourself as a customer that you always get paid.
1. Don't Conceal Information:- While taking a life insurance policy any information pertaining to your health/habits which can put an impact should disclose. Any pre-existing disease or condition or smoking/drinking habits or anything that can be linked as being as cause to your hospitalization or death will be investigated and if you have not disclosed to the company about it then sum assured & other benefits will not be given to you or your dependents/nominee. Remember your premiums are decided on this information. If there is nothing that can be held against you then the insurer will have to honor the insurance claim.
2. Accept Medical Examination: After certain age, life insurer ask for sponsored medical examination and test to get better understanding of your medical condition. These test may also help you detect diseases early, and treat them accordingly. These test will decide acceptance/rejection of policy or clear your doubts about any future rejection of claims due to concealing health information. 
3. Pay Insurance Premium On-Time: Remember Insurance company only settle claims on Active Insurance Policies. But there are number of people who do not understand that delaying premium payments result in lapsed policies. Once your policy get lapse, you are no longer covered and all your premiums paid that far will be rendered useless. Your nominee may lost their legal validity to get sum assured on death from the company. In some cases delaying your insurance premium payments lead to Late Payment Surcharge for re-reinstatement of the policy.
4. Nominee Information: Nominee is the person who will receive any and all benefits that come out of your insurance policy in your absence. Nominee should be generally that person whose livelihoods are directly depends on you being alive and well. So nominate some one is more important. If you are single than nominate your parents, if married then spouse or children. Whatever your present relationship status is, always keep nominee name update so that some benefits will to some dependents of yours. If there is no nominee then death benefits may be freeze/rejected.
5. Scrutinize the Policy Documents: Merely telling the insurance agent everything about your medical history will not qualify him to understand and explain all on the form about your medical history. Insurers decide your premium payment amount, overall coverage, and even some exclusions based on whats' filled out in your forms. No one knows better that you, and you need to make sure the insurance provider knows too. You need to take the time out of your busy schedule and check the form that all details are filled in order and truthfully. Check Clauses such as the exception list that indemnifies the insurer from any kind of liability towards you exist all over your policy documents. 

Keep  yourself informed about all developments with your insurer. Keep yourself informed about the details in your policy documents. Stay well informed about the conditions under which you will be eligible for a claim. 
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Tax Benefits For Senior Citizens

In this blog we will discuss Income Tax Benefits to Senior Citizen available as per Income Tax Act. A person becomes senior citizen once he attains 60 years of age. Income Tax Department categories Senior citizen into two part. First Senior Citizen is with age bracket of 60 years to 79 years old and Second Senior Citizen is with age bracket of 80 years and above. 
Income-Tax-Exemption-Available-for-Senior-Citizen
There are some tax exemption available for senior citizen. From F. Y. 2011-12 qualifying age limit for senior citizen has been reduced from 65 years to 60 years and from F Y 2015-16 exemption limit for senior citizen has been enhance from 2,50,000/- to 3,00,000/-. 

A new category of Very Senior Citizen has been introduced in F Y. 2011-2012 (A Y 2012-13) with qualifying age 80 years and above with enhance exemption limit of Rs.5,00,000/-.

Senior Citizens and very senior citizen are granted a higher exemption limit as compared to normal tax payers.

EXEMPTION LIMITS
The Exemption Limit of a Senior Citizen for the financial year 2016-17 available to a Resident Senior Citizen is Rs.3,00,000/-. An Additional benefit of Rs.50,000/- in form of higher exemption limit available to Resident Senior Citizen in comparison to non-senior citizen.
The Exemption Limit of a Very Senior Citizen for the financial year 2016-17 available to a Resident Senior Citizen is Rs.5,00,000/-. An Additional benefit of Rs.250,000/- in form of higher exemption limit available to Resident Very Senior Citizen in comparison to non-senior citizen and Rs.2,00,000/- higher than Resident Senior Citizen.

TAX BENEFIT OF MEDICAL INSURANCE
From Financial Year 2015-17 (A Y 2016-17) a Resident Senior Citizen can claim higher deduction of Rs.30,000/- under section 80D on insurance premium paid for Medical Insurance. Earlier it was Rs.20,000/-

HIGHER DEDUCTION U/S 80DDB
Section 80DDB provides deduction to an assessee in case of expense on medical treatment of specified ailments. Deduction Limits is Rs.40,000/- for normal patient while deduction limit Rs.60,000/- for a senior citizen patient.
From A Y 2016-17 higher limit of deduction of upto Rs.80,000/- is allowable for the expenditure incurred in respect of the medical treatment of a Very Senior Citizen.

TDS EXEMPTION ON BANK DEPOSITS
Senior Citizen can claim exemption on the Tax Deducted At Source (TDS) on interest income earned on bank deposits. It can be done by submitting Form 15H  under Section  197 of the IT Act.

HIGHER INTEREST RATES
Senior Citizen receives higher interest rates on 5 Year Fixed Deposit which is eligible for deduction from total income under Section 80C.
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Insurance Premium Saving Factors !

Friends asks, how to save insurance premium? What are the way to save insurance premium? How I can save insurance premium? What are the factors that affect insurance premiums? Hope many of us always thinking about this. And always ask our Insurance Agent friends. 
A Lower premium paid can yield to a good amount of savings over a period of few years. Life insurance premiums are based on number of factors and it can be quite tedious for few people to understand. Like why insurance premium of  same same are not same? Why premium of same age & same amount not same? etc..
There are some factors that many insurance companies consider when pricing their policies. Those factors can effect your life insurance premium which not in our control but we can.
There are some factors listed below which affect our life insurance premiums are:

Insurance Premium Saving Factors.a) Age Factor: This is factor always affects insurance premium. If you are young the rates will be lower in comparison to someone older. The death possibility or contract to life threatening disease in younger individual are very low. The insurance companies believes that a young can pay many insurance premium installments before they have to write a cheque for your family.

b) Policy Type Factor: Different type of policy charges different types of life insurance premium for the same person for same tenure and same Sum Assured. It differs the bonus amount/ Loyalty Amount payable on that policy. Like Premium of New Jeevan Anand Policy and New Endowment Policy of 21 year old person for 20 years terms are differ.  

c) Policy Tenure Factor: The policy tenure also affects insurance premium. The longer the tenure of the policy the larger the amount of benefit at the time of death as well as lower premium amounts. Short term policy are more expensive than of long term insurance policy.

d) Rider Factors: Some policy offers riders on that particular policy. If someone opt this rider than its premium amount become higher than without rider. So when you opt it think about it.

e) Medical History Factor: Every person who like have an insurance policy need to provide their health records.These records ensures that you don't have any chronic diseases or potential health issues. This keeps a check on your premium amount.  
But if a person has medical history of serious illness like cancer, heart diseases or any other then that makes them susceptible to get these from a hereditary perspective. Which increases the individuals insurance premium by larger margin than.

f) Profession Factor: Your profession/job also plays an important role in the premium you pay for the policy you want to take. Any policy holder working in the mining industry, oil And gas, fisheries or any other dangerous profession increases the premium amount.

g) Hobby Factor: Many insurers have a higher premium for people who love to takes risks for the thrill of it, like speeding cars / car race, climbing treacherous mountains or participates in other high risks activities. Thereby increasing your premium to substantially more than other.

h) Drinking / Smoking: Insurance companies ensure to ask the applicant if they are smoker or drinker. Drinking or smoking is always injurious to health. So if you are a smoker / drinker that raises red flag to insurance companies. Mostly these kind of people pays double the insurance premium than that of non-smoker/drinker. So, avoid it.

i) Gender Factor: Insurance companies ask for your gender. This does not mean insurance companies are against gender equality, But they believes that there is a different life expectancy for different genders. As per studies and statistical findings, women are believed to live 5 years more than men at the minimum resource. Therefor affecting the premium they pay for a larger period of time but at lower rate which is a plus point for the women.
How these factors affect your insurance premium is depends on the insurance company policy about the way they treat these factors and the combination of them. Every insurance policy is based on each individual and premiums are calculated on the insurance company's rules of rating.

Consider these above factors to live a health life and save money.



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How Much Insurance Do I Need !!!

Do all of us require life insurance?? My answer is "YES" Because, Health of elderly parents, Education of Children and life of Spouse are put under a big question mark when bread earner dies. Not only losing the loved ones, most of the times families get into serious financial crisis. Now the question is " How Much Life Insurance Do I Need To Secure My Family?" But first you realize that whether you need any life insurance to take. If so, then here are some parameters on calculating how much life insurance you really need.

1. Earning Power: Life insurance amount must cover at-least the earning power of the person. For Example you earn Rs.50 thousand per month then your expenses ratio would around this amount. Now if something happens, interest income from insurance policy claim proceeds must be around or more than Rs.50 thousand, considering the fluctuation in money value due to inflation.

2. Dependents: If you are young and single you do not worry much about this. Mostly liability started arise once you get married. But after marriage this is must. Your Spouse and your children or your parents requires it more in your absence, because they depends on you.  If you are only earner in the family then you need higher insurance coverage.

3. Having Loan: If you have some loan/debt then the policy coverage must be higher to cover your loan/debt amount. Imagine the situation when the person had a bulk house loan to pay and there is no earner. Remember when you have loans or other debts, consider taking a policy with higher coverage after checking your affordability to pay the premium along with EMI.

Life insurance is not necessary if you do not dependents. Having surplus resources to take care of dependents. No debts/Loan, You are single and just started earnings.

There are some basics to check it like Take all your insurance policies and calculate total insurance cover you have. Now analyze and compare it with your earning in your absence and ask yourself "will this amount fulfill / protect family's lifestyle forever in my absence". If your earning does not allow much to take regular insurance cover then go for some Term Insurance.

Calculate and take the right insurance cover for you and protect your family's lifestyle forever. 
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Top Investment Idea U/s 80C

Many of us start investment only in February or March, i.e. just before the Financial Year getting over. This could be a big mistake. You may invest your money without proper planning. You may lose interest/appreciation for the whole year. Right time to start planning to invest is start of the financial year. This way you would not only make well informed decisions but also can earn interest for the whole year.

Where_to_InvestHere we will discuss about investment and tax deduction under section 80C of Income Tax Act. Section 80C replaces Section 88. Section 80C has become effective from 1st April 2006. Section 80CCC on Pension Scheme also merged with this section. Section 80C of IT Act allows certain investment and expenditure to be tax exempt. 

The maximum limit of deduction under section 80 is Rs.1.50 lakh from F Y 2014-15 / A Y 2015-16. Before F Y 2014-15 the limit was Rs.1.00 Lakh.

Most of the Income Tax payer try to save tax by saving under section 80C. Must note that under this section you can not only just save tax on investment bust also save tax on certain Expenditure.

Top Investment idea U/s 80C:-

1. Life Insurance Premium: Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in this section deduction.

2. Unit Linked Insurance Plan: ULIP covers life insurance with benefits of equity investments. They have attracted the attention of investors and tax-savers not only because it help us to save tax  but also give decent returns in long-term.

3. Provident Fund: PF is deducted from your salary every month and both you and your employer contribute to it. While employer's contribution is exempt from tax, your contribution will come under section 80C. This deduction is compulsory, so this has to be the first and also apart from tax saving, it builds a long term, tax free retirement corpus for you.

4. Public Provident Fund (PPF): Public Provident Fund  is one of the best investment. Interest is compounded yearly and the normal maturity period is 15 years. You can deposit minimum Rs.500.00 and maximum Rs.1.50 Lakh. Remember rate of interest may vary by govt. notification.

5. Equity Linked Saving Scheme (ELSS): This is a mutual fund (MF) specially designed to save tax. The investments that you make in ELSS are eligible for deduction under section 80C.

6. National Savings Certificate (NSC): It is good investment option with a maturity period of Five years and Ten Years. Compounded Interest accrued Half Yearly. Minimum investment in NSC is Rs.100.00 and No Maximum limit. You can withdraw NSC before maturity period in case of certificate holder. Remember Investment in NSC are eligible for deduction but accrue interest income is chargeable to tax in the same year.

7. Pension Fund: In this Section 80CCC investment limit is clubbed with the limit of Section 80C. It means total deduction limit under section 80C and 80CCC is Rs.1.50 Lakh. This means that your investment in Pension Funds upto Rs.1.50 Lakh can be claimed as deduction under section 80C.

8. Five Year Bank Fixed Deposit (FD): Tax Saving fixed deposits with tenure of 5 years are also entitled for section 80C deduction.

9. Five Year Post Office Time Deposit: This is similar to bank's fixed deposit scheme. Interest is compounded quarterly but paid annually. Interest is totally taxable.

10. Home Loan Principal Repayment : The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components- (i) Principal Amount (ii) Interest Amount. The principal component qualifies for deduction under section 80C. And interest component save your tax under section 24 of IT Act. If you have taken home loan this is an automated EMI deduction cum investment. 

11. Sukanya Samriddhi Account: If you have blessed with girl child then it is for you only. You can open account under this scheme from the birth of a girl child till she attains the age of 10 year with minimum deposit of Rs.1000.00 and maximum deposit of Rs.1.50 lakh per year. Accrued interest under this scheme is fully exempt from tax in that year as well as in the year of receipts. For more you can read details in Notification No. G.S.R.863(E) Dated 02.12.2014.

Decide and Analyze which investment idea suite you to save tax and save your money with good return. Decision is yours. Have a happy investment.
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With Profit And Without Profit Plans

Many people who have their life insurance policy get notice that their plan is may be "With Profit" or "Without Profit". Some time they thought why certain plans are categorized like this. And wiling to ask their agent. Here are the answer.
An Insurance Policy can be "With" or "Without" profit. Life insurance companies from time to time declare bonus (profit share) on their plans. 
An insurance plans in which this bonus/profit share is passed on to the policy holders is called a "with profit" plan. Bonus are allotted after certain periodical valuations to the policy and are payable with the maturity amount.
But  in a "without profit" plan this bonus is not passed on to the policy holders. Therefore, the premium rate charged for a "with profit" plan is little higher than that for a "without profit" plan. 
The percentage of bonus may vary from one policy to another depending on the type, term and the premium of the respective policy, amount other considerations.
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Register and Get Facility with LIC eService Portal

LIC has comes up with some new features with Lic’s e-service. You can register your policies at LIC portal with some simple steps and save lots of time.
Lic’s e-service is an initiative is to provide you with on demand service within a few clicks! You can now have many of the functionalities that were available only at branch office, Now it will be online at your fingertips. To avail this facility you have to get register as customer on LIC portal.
How to get Register on LIC Portal:
Register-and-Get-Facility-with-LIC-eService-PortalFirst you have to visit www.licindia.in  , click on the tab “New User “ , select your own USER ID & Password and provide all the other necessary information . Now you are a registered customer portal user.

LIC’s e-services portal for customers has come up with a lot of new facilities. Now if you register you can avail the following benefits: 


1.  Online Payment Facilities:
This facility provided to pay renewal premium dues, payment, repayment and loan interest due of loan through net banking, debit card, credit card, BHIM, UPI
2.   POLICY Schedule:
First page of policy bond which constitutes policy schedule will be displayed.

3.   Policy Status :
Basic detail of policy will be displayed such as plan, term, sum assured, date of commencement, first unpaid premium etc.

4.  Bonus Status :
     Total bonus accumulated under the policy will be displayed.

5.  Loan Status :
Present loan position will be displayed such as total loan outstanding under the policy, due up to which loan interest paid etc.

6.  Claim Status:
This option will display date of survival benefit (if any) or maturity benefit due under the policy during the policy term.

7.  Revival Quotation:
Revival quotation will be provided in case of lapse  policies.

8.  Premium Due Calendar:
Detail of premium due during the year (month wise) will be displayed.

9.  Premium Paid Certificate:
Individual policy – it provides history of premium paid under a single policy during the financial year.
Consolidated – it provides history of premium paid under all the registered own life policies of the user.

10. Claim History:
 This option will provide details of any claim paid under the policy with NEFT/  Cheque details, date of payment and amount of payment.

11.  Policy bond/proposal form image;
 Scanned image of the policy bond as well as proposal form will be displayed for enrolled  policies.
12.  Grievance registration:
Facility to register a complaint /grievance with insurer.

In future the benefits will further be enhanced. If you face any problem in registering, you may contact us/your Agent or to your nearest LIC Branch.


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Effect of GST on Insurance Premium

With  a hike in GST rates to 18% from the current 15%, the insurance sector are poised to get more expensive after July 1, 2017. The immediate effect will be the increase in premiums especially for families that own Life Insurance, Health Insurance and Car Insurance.

The existing and new insurance buyers would have to bear the updated prices. The Policy holders stand a chance to be benefited if the insurance providers get a green signal on the input tax credit benefit. Unfortunately, as of yet, it is still unclear since he Center/State GST  structure is very complex. It might create confusions and conformity for the insurance buyers and increase the administrative expenses for the insurance providers. If the insurance buyers remain confused about the GST updates, then irrespective of the increase or decrease in the prices the financial strength will adversely affected. The general insurance sector will be equally impacted. The overall outgo for health, car, and various non-life plans would be increased by 3 percent.

The Insurance policies premium represents two components - Savings and Risk Coverage. The service tax is levied specified only on the premium component. 

What GST (Goods And Service Tax) Rules says, the value of service on which the GST is levied regarding the life insurance sector shall be accordingly;
(i) The gross premium would be reduced by the amount allocated for or savings or investment on policyholders behalf.
(ii) When it comes to the single premium annual policies, ten percent of the single premium would be charged from the policy holder.
(iii) In other cases, 25 percent of the premium for the first year and 12.5% of the premium in the upcoming years will be charged.
(iv) In case the total premium paid by the policy holder is towards the life insurance's risk cover, oly the 18% GST would be levied on the total premium.

There are three types of life insurance;
* Term Insurance Plans - Basic life insurance policy
** ULIP Plans - Insurance and investment under a single integrated plan
*** Endowments Plans (including money back plan) - Life insurance policies that pay a lump sum on maturity/death or a fixed sum every month (like pension)

List of new revised rates on all insurance plans are as follows :
GST RATES : NEW RATES UNDER GST FOR
INSURANCE POLICIES
INSURANCE PRODUCTS
BEFORE GST
AFTER GST
APPLICABILITY
Endowment Plans – 1st Year
3.75%
4.50%
On 25% of Premium
Endowment Plans – Renewal Premium
1.88%
2.25%
On 12.5% of Premium
Health Insurance Premium
15%
18%
On Entire Premium
Rider Premium
15%
18%
On Entire Premium
Annuity: Single Premium
1.50%
1.80%
On 10% of Premium
Term Insurance Premium
15%
18%
On Entire Premium
ULIP (On Charges)
15%
18%
On Premium minus
Investment Amount
Vehicle Insurance
15%
18%
On Entire Premium
Travel Insurance
15%
18%
On Entire Premium

Life and health insurers will not have input tax credit as it is not available for life and health insurances ( as they are for personal purposes). Even corporate policyholders with group life and health insurance for their employees will not enjoy any input tax credit.

Life insurance provided under Government Schemes are exempted from GST;
1) Janashree Bima Yojna (JBY)
2) Aam Aadmi Bima Yojna (AABY)
3) Life Micro-Insurance product (as approved by the IRDA having maximum amount of cover of fifty thousand rupees)
4) Varishtha Pension Bima Yojna (VPBY)
5) Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY)
6) Pradhan Mantri Jan Dhan Yojna
7) Pradhan Mantri Vaya Vandan Yojna 
8) Any other insurance schemes of the State Government as may be notified by Government of India on the the recommendation of GST Centre.

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Health Insurance And Tax Benefit

Health is Wealth or You may say Health is the greatest assets for a human being. Our overall health is severely affected by our lifestyle. Unhealthy Eating Habits, Lack of Adequate Sleep, Stress can affect our health. A Mediclaim policy acts as savior & it protect you from facing a financial crunch in a medical emergency. Since Inflation has made medical bills costlier, having a heath insurance policy is necessary as other necessities.

There are dual benefits of the health insurance. First it ensures your financial stability and give coverage against expensive medical bills and also offer you benefit of Tax Deduction under section 80D upto Rs.25,000/- to Rs.30,000/- (for Senior citizen).

In order to enjoy tax deductions along with health coverage, you need to check which policy suits you & your family and how much premium required for. The premium amount paid by you can be utilize as Tax Rebate Tool. Remember, if the premium paid by your employer, you will not be eligible for tax rebate. Under the IT Act, 1961 medical allowance is not considered as an allowance, which is exempted. 

Generally, medical allowance is confused with medical reimbursement. Medical reimbursement is paid by an employer to their employees when they submit medical bills. 

When it comes to tax planning, people generally don't consider their parent's health insurance as a tax saving tools. If you are paying for your parents health insurance, you can claim upto Rs.30,000/- as tax deduction benefit in your annual income tax return. 
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Service Tax Paid on Insurance Premium U/s.80C

Service-Tax-Paid-on-Insurance-Premium-U/s.80C
Many question arise about "can we take benefit of paying service tax paid on Insurance Premium!" If we check insurance premium receipts properly we get that the we pay three cost heads; Net Premium + Service Tax + E. Cess. On this basis final gross premium is calculated.

Now question is "can we take claim under section 80C of service tax paid along with insurance premium?"

The current tax rules states that "any amount paid to keep in force a life insurance policy qualifies for a tax deduction under section 80C." It is a common perception that Premium Paid all Life Insurance Policies are qualifies for deduction under section 80C of Income Tax Act, 1961. 

As per Section 80C(2) of the Income Tax Act, 1961 any amount paid to an insurer to buy or to keep a life insurance policy in force can be claimed as a deduction from gross total income by the policy holder. This implies that premium paid for a life insurance policy can be deducted from gross total income before arriving at taxable income subject to certain condition.

Section 80C(2) also clarifies that in order to claim the deduction from gross total income for a particular year the gross amount of premium must be paid or deposited in that particular financial year itself.

But when you ask insurance provider to provide Total Insurance Premium Paid Statement then they will provide you only statement of net premium paid

Tax experts interpret this to mean that the entire premium inclusive Service Tax and Cess, qualifies for a tax deduction.

Ideally, you need to mention the entire premium or gross premium for the purpose of availing a tax deduction under section 80C.

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Which is better Paid-Up or Surrender?

A life insurance policy in which if all the premium payments are complete till some specified period and insured person is free of all payment obligations and the policy stays intact until insured's death or termination by its maturity or Surrender of the policy is called Paid-Up Policy.

Life Insurance Policies usually last the insured person's lifetime or maturity period, but some some policies can be paid up completely till a specified period. Only Traditional Life Insurance Plans can be a Paid Up Policy. 

It is calculated as the ratio of number of premium paid to the total number of premiums payable multiplied by the Sum Assured value.

 i.e. Paid-Up Value = No. of Premium paid /No. Premiums Payable X Sum Assured.


For Example:  Pradip has one traditional Endowment Policy having Sum Assured Value Rs.2,00,000/- and the policy tenure is 16 years. Unfortunately Pradip did not able to continue his policy after continuing is upto 8 years full premium paid. 
Now from very next year he did not paid any due premium to make it continue, hence very next year this policy become automatically a Paid-Up policy.

Which is better Paid-Up or Surrender of Policy?
Now, Pradip has two option either he can go and surrender his policy by providing all necessary documents to the branch or let it become Paid-Up.

Also Read : How To Surrender An LIC Policy ??

A Policy can be paid-up from next premium due. Suppose I continue my policy up-to 8 years and from next year I fail to pay premium then it become automatically Paid-up to its proportionate to its  premium paid ; Payable And Sum Assured.

Every Insurance Plan has it surrender value which can be known from servicing branch. Its is approx 30% of Sum Assured in regular plan and up-to 90% in single premium plan.

If we calculate in both condition then we can make comparison itself and understand which is better. For Example you have S.A.=2,00,000/-; Tenure - 16 Years; Premium - Rs.13000 (Approx); Premium Paid up-to full 8 years.

Surrender Value : Rs.2,00,000 X 30% = Rs.60,000/-  (Immediate Payment)

Paid-Up Value : Rs.2,00,000 X 8/16 = Rs.1,00,000/- + Vested Bonus  (Payment after death or maturity)

You can decide which is better. On Surrender you will get immediate payment while on letting Paid-Up of Policy you will get after death or maturity which ever is earlier)
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How To Make Claim in Insurance ?

What is Claim in Insurance?
Let’s talk about claim. Claim is the demand that the insurer (i.e. LIC of India) should redeem the promise made in the contract. Then the insurer settle the claim after satisfying himself that all the conditions and requirements for settlement of claim have been complied with.
Types of claims:-
An insured person can make claim according to condition complied to contract between Insurer & Policyholder. Claim can be made against Maturity; Death or by Surrendering a policy.
In Money Back Policy, LIC or other Insurance company also pays Survival Benefit Payment before the date of maturity.
How to Make Claims and what are the documents required for?
(A)Maturity Claims:-
When Life Insurance Policy is maturing, the insurance company will usually send intimation prior to due date at least two to three months in advance of the date of maturity with maturity amount payable details.
Policy holder should contact his servicing branch to know about claim procedures & sets of documents required. The Insurance Company asks for following documents:
(          1)Maturity Claim Form No. 3825
(          2)Original Policy Bond
(          3)Discharge Voucher with witness sign
(          4)NEFT Details with cancelled Cheques
(B)Death Claims :-
When a person with life insurance policy dies, claim intimation should be sent to the insurance company as early as possible. The Assignee or the Nominee under the policy can do this with the help of his agent or relative.
The claim intimation should contain information like Date, Place and Cause of Death. The Insurance Agent should help the Insured Person Family or Assignee to deal with the Insurance Company. The Insurance company will respond and ask for the following document :
(       1)Maturity Claim Form No. 3825
(       2)Certificate of Death
(       3)Original Policy Bond
(       4)Discharge Voucher with witness signature
(       5)NEFT Details with cancelled Cheques
*If the policy has been assigned in favour of any other person or entity like any Loan provider company – the claim amount will be paid to the assignee who will give discharge.

(C) Surrender of Policy : - Please visit post How to Surrender LIC Policy?


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