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Why is Life
Insurance Better ?
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Life
Insurance is the only savings scheme which covers the Life
Risk besides giving tax concession both at entry (Premiums
Paid) and at exit points (Maturity + Bonus).
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Sec 10
(10D) of the Income Tax Act totally exempts from paying tax
on any amount received as Bonus against Life Insurance
Policies ( except on Jeevan Aadhar, Key-Man Insurance,
Jeevan Dhara, Jeevan Akshay policies ).
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A
deduction from taxable income upto a maximum of Rs. 10000 is
allowed towards the premium paid in one year for Jeevan
Suraksha Policy. This is a seperate deduction u/s 80CC.
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Life
Insurance promotes compulsory savings besides reducing tax
burden and protecting the family in the event of any un-forseen happening.
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Life
Insurance cover is as much a necessity as food and clothing.
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Loan
also can be availed on LIC policies from LIC.
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LIC
policies can be pledged as a collateral security for raising
loans from Banks and other Financial Institutions also.
| Details |
LIC |
PPF |
NSC |
ULIP |
Equity
Linked Savings Scheme. |
| Life
Cover |
Yes |
No |
No |
Yes |
No |
| Accident
Cover |
Yes |
No |
No |
Yes |
Sometimes |
| Bonus |
Yes |
No |
No |
Yes |
No |
| Min.Lock-in
Period |
3
years |
7
years |
3
years |
1-5
years |
3
years |
| Basis
of Returns before Tax |
Past
Performance and LA/GA |
Guaranteed |
Guaranteed |
Past
performance |
Maily
through capital gains |
| Cumulative
Returns |
10-12% |
11% |
11% |
12-13% |
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| Mode
of Payment |
As
per your convenience. (Yly, Hly, Qly,Mly & SSS) |
at
a time
(min.Rs 100) |
at
a time |
Stipulated
and Date (period) |
at
a time |
| Treatment
of Returns for Tax |
Tax
Free |
Tax
Free
u/s 10 |
Sec
80L |
Sec
80L |
Long
Term Capital gains |
Tax
Rebate
(u/s 88) |
20% |
20% |
20% |
20% |
20% |
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