According to Economic Times, India, ‘Underwriters Thumb Rule,’ life insurance need is a multiple of annual income depending on the age. As an indicative rule, for instance, individuals between 20 and 30 years of age should have life insurance worth 15 times their annual income, while those above 56 years of age can have 6 times their annual income.
A life insurance plan entitles the bearer to a pre-decided maturity benefit mentioned in the policies. Therefore, if they survive the term, they are applicable to receive a specific maturity benefit. On the other hand, a term insurance plan is a life insurance plan but with a fixed time, called the term. Once a person opts to take a term insurance plan, the bearer is insured for the term. During that period, if the person is no more, the main corpus (sum assured) is paid by the insurer to the bearer’s nominee. However, no claim can be made if the person survives the term.
It depends upon the type of insurance that you have, below are two points covered to know about your tax benefits: • Life insurance premium of up to ₹1.5 lakh can be claimed as a tax-saving deduction under Section 80C. • Medical insurance premium of up to ₹25,000 for yourself and your family and ₹25,000 for your parents can be claimed as a tax-saving deduction.