LIC Jeevan Labh is an endowment-based policy that assures guaranteed returns to the life assured and her/his dependents. In addition to the death and maturity benefits, policyholders can also enjoy tax benefits under Sections 80C, 80D, and 10(10D) of the Income Tax Act. After working hard the entire year to earn money, it becomes crucial for every individual to wisely pay taxes while saving. This article discusses the LIC Jeevan Labh policy and its tax saving avenues in detail.Read more
LIC Jeevan Labh is a limited premium paying, with profits, non-linked endowment scheme that offers financial protection to the policyholders and their families. On assuring a decent sum on death or maturity of the policy, the beneficiaries receive a lump sum payout. The policy also offers multiple other features to its policyholders.
Some of the key features are:
The beneficiary or nominee can claim the death benefit upon your unfortunate demise.
You can also claim a maturity benefit amount on surviving the policy tenure. These returns are guaranteed and can help you grow your corpus.
Based on the profits earned by LIC in a financial year, it declares bonus rates that you can enjoy along with the assured benefits stated above.
Should you find yourself in an urgent for capital, you can avail of loans subject to the surrender value of Jeevan Labh policy.
If you are prone to occupational hazards or has a history of medical ailments, you can avail of extra cover against accidental death and critical illnesses. These riders are available at small extra premiums that enhance your overall protection.
You can also enjoy significant tax savings of up to Rs. 1.5 lakhs under Section 80C of the Income Tax Act, 1961.
The following sections will attempt to highlight key aspects of tax savings with LIC Jeevan Labh under 80C. However, you must note that tax savings are subject to changes in the tax laws.
Every premium payment you make towards your life insurance policy is covered under section 80C of the Income Tax Act, 1961. If you invest around Rs 1.5 lakhs, you can save approximately Rs 46,800 in a financial year.
If you are wondering when to start your insurance coverage to be eligible for tax savings, the ideal period is any time between 1st April to 31st March of the following financial year. Please note that you can start your policy at any point within the above-mentioned period if you opt for a yearly premium payment mode.
Purchasing LIC Jeevan Labh policy requires the buyer to pay a premium amount against it. The annual premium you pay for the life coverage (even if the policy is not under your name) is eligible for tax savings deduction under Section 80C.
It is important to know that the deduction with LIC Jeevan Labh under 80C is only valid if the premium amount is less than 10% of the basic sum assured.
Tax savings with LIC Jeevan Labh under 80C can be to the tune of Rs. 1.5 lakhs on investing a proportionate amount in the life insurance policy.
For individuals falling in the highest tax bracket of 30%, one can save up to Rs. 46,000 approximately. Likewise, those belonging to the tax bracket of 20% can save approximately Rs. 30,000 under Section 80C of the Income Tax Act on investing in LIC Jeevan Labh.
Furthermore, it is noteworthy that all kinds of returns such as death and maturity benefits, bonuses, surrender values are tax-free under Section 10(10D) of the Income Tax Act, 1961.
Investing in the LIC Jeevan Labh policy acts as an excellent means to save on your taxable income besides providing financial protection to you and your family. You can use the amount saved to fund your various other important needs or simply add to your savings account.
If you are planning on buying life insurance, consider LIC Jeevan Labh for its multiple benefits and tax savings. However, read the plan documents in detail before making the final purchase.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ