Insurance is not just about protection—it’s also a smart tool for tax savings and financial planning. Whether it’s health, life, or investment-linked plans, choosing the right option ensures maximum coverage at minimum cost. Let’s break down insurance options, tax benefits, and tips for affordable coverage.
1. Insurance Options in India
Life Insurance
Types: Term insurance, whole life, ULIPs, endowment plans.
Purpose: Financial protection for dependents, wealth creation.
Health Insurance
Types: Individual, family floater, senior citizen, critical illness.
Purpose: Covers hospitalization, medical emergencies, and long-term care.
Motor Insurance
Types: Third-party, comprehensive.
Purpose: Legal compliance, vehicle repair, and liability cover.
Travel & Home Insurance
Purpose: Protects against trip disruptions, lost baggage, and property damages.
2. Tax Benefits of Insurance
Section 80C: Life insurance premiums eligible up to ₹1.5 lakh per year.
Section 80D: Health insurance premiums eligible up to ₹25,000 (₹50,000 for senior citizens).
Section 10(10D): Life insurance maturity/death benefits may be tax-free.
ULIPs: Dual benefit of market-linked returns and tax savings.
3. Affordable Coverage Tips
Buy Early: Premiums are lower when you start young.
Choose Term Plans: High coverage at the lowest cost.
Go for Family Floater Health Plans: Covers all members under one premium.
Compare Before Buying: Use online calculators to evaluate premiums.
Opt for Add-Ons Wisely: Select only those you truly need (like zero depreciation for cars, or critical illness for health).
Annual Premiums Over Monthly: Paying annually often reduces extra charges.
FAQs
Q1: Which insurance gives maximum tax benefit?
Life insurance under Section 80C and health insurance under Section 80D.
Q2: Can I claim both life and health insurance premiums for tax deductions?
Yes, both can be claimed separately under their respective sections.
Q3: Is cheaper always better in insurance?
Not necessarily—ensure sufficient coverage while balancing costs.
Q4: Do ULIPs carry risks?
Yes, ULIPs are market-linked. Choose only if you are comfortable with market exposure.
Q5: Should I review policies regularly?
Yes, review coverage every few years or after major life events (marriage, children, home purchase).
Published on : 12th September
Published by : SMITA
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