Skip Navigation
0 of 0 Displaying
 |   Displaying

No Results


    Tax benefits you can reap from a term plan

    Last Updated On 15-01-2020

    Investment in term plans is a blessing in disguise with its two-pronged benefits – providing a life cover to the policyholder and offering tax benefits both on the payment of premium as well as with the proceeds on maturity. The Indian Income Tax Act, 1961 governs the term plan tax benefits. In this Act, there are numerous sections that assist the policyholder in getting tax deductions and reducing the taxable income.

    The specified sections under the Income Tax Act for Term Insurance tax benefits are Sections 80C and Section 10(10D). Here are details under these sections that can help you in your tax planning.

    Term Insurance under Section 80C
    Under this section, you can take advantage of the tax deductions on the premiums that you have paid for yourself and your dependents that include your spouse as well as your children. There is a maximum limit of Rs 1.5 lakh set for this kind of investment, wherein you can enjoy tax deductions.

    There are specific clauses for deduction under this section. These include:

    1. If and when the premium amount is more than 10% of the ‘sum assured amount’, you can claim a maximum amount as a tax deduction up to 10% of the assured sum. However, this is applicable only to those plans that issued on or after 1st of April 2012.
    2. You can claim a tax deduction on the total premium paid up to a limit of 20% if you have purchased a term plan on or before the 31st of March 2012.
    3. In case you are suffering from any ailment that is mentioned in the section 80DDB or has a disability that is specified in the Section 80U, you can extend your existing limit from 10% to 15%. Nonetheless, this clause is only applicable to those term plans that were issued on or before the 1st of April 2012.

    All the above-mentioned term plan benefits under this section can be availed by members of Hindu Undivided Family (HUF) as well as individuals.

    Term Insurance under Section 10(10D)
    In addition to the term plan tax benefits for the premium paid under Section 80, death benefit under term insurance gets tax benefits under Section 10(10D).
    In term plans, there is a specific amount promised that is offered to the policyholder’s family/nominee in case of death of the policyholder before the term period expires. This amount assured as a death benefit gets complete tax exemption under Section 10(10D).  Moreover, this tax exemption under Section 10(10D) has no upper amount limit.

    There are certain conditions attached to it, where it will not be applicable:

    1. In case the amount is being offered under Section 80DD (3), which includes those deposits that are made for maintenance such as the medical treatment of handicapped dependent.
    2. When the amount is being offered under the Keyman Insurance Policy
    3. In case when the amount is not a component of the death benefit for a policy that is issued on or before the 1st of April 2003, rather in the period on or after 31st of March 2012. In addition, this benefit will not be applied for those premiums paid during the policy term that exceeds the limit of 20% of the sum assured.
    4. If and when the term plan is issued on or after the 1st of April 2012, you can avail the benefit of tax exemption only if the total premium paid is not more than 10% of the sum assured amount.

    Therefore, it is vital that while paying premiums for your term insurance, you must be careful that it does not fall under any of the aforementioned conditions so that you are able to get the maximum benefit of Section 10(10D).

    Best Term Plan: Financial Stability, Not Tax Benefit
    It is essential to understand that even though there are numerous tax benefits with a plan, the prime criteria should for choosing any term plan should be the conditions including the exclusions and inclusion, rather only using it as a tax benefit instrument. The tax benefits for most of the term plans are similar. Therefore, here the determining factor should be strictly limited to term plan component, its premium charges, claim settlement ration so on and so forth. Browse the website to know more about Life Insurance, Long Term Savings  and the various Term Plans offered by PNB MetLife.


    The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.

    PNB MetLife India Insurance Company Limited, Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka.
    IRDAI Registration Number 117. CI No: U66010KA2001PLC028883. For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding the sale.
    The marks “PNB” and “MetLife” are registered trademarks of Punjab National Bank and Metropolitan Life Insurance Company, respectively. PNB MetLife India Insurance Company Limited is a licensed user of these marks.
    Call us Toll-free at 1-800-425-6969.. Phone: 080-66006969, Website:, Email: or Write to us: 1st Floor, Techniplex -1, Techniplex Complex, Off Veer Savarkar Flyover, Goregaon (West), Mumbai – 400062, Maharashtra. Phone: +91-22-41790000, Fax: +91-22-41790203


    • IRDAI is not involved in activities like selling policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.


    Tax optimization to reduce your tax outgo by 28%

    The Income Tax Act, 1961, contains many provisions that can be used for tax optimization. By knowing which provisions of the Act can help you obtai...


    Term insurance serves to give financial protection to our family even in our absence. Buying the perfect life insurance plan ensures that the famil...


    The Essentials of Disability Insurance: 10 Simple Tips

    Unforeseen events can make the future uncertain. Hence, it's important to prepare as best as we can for whatever life may bring. Even though you ha...


    The importance of Life Insurance for financial security

    The sudden and untimely demise of a family member is something that we don’t typically want to think about. But we should. You should think about t...


    The importance of Life Insurance for financial security

    The sudden and untimely demise of a family member is something that we don’t typically want to think about. But we should. You should think about t...

    Want to know more about how you can protect your family?

    See all our articles

    Get a Callback

    OTP sent successfully

    Thank you for getting in touch with us. We will contact you shortly.


    Collapsed Expanded

    As your trusted life insurance partner, PNB MetLife is with you amidst the current COVID-19 outbreak. Our policies also cover COVID-19 Claims. In case of a Death Claim, kindly submit the signed Claim Intimation Letter mentioning the policy number, brief of the insured event and other claim documents on the email mentioned herewith. Please write-in to us at or You can also call us on 1800-425-6969 for death claims intimations and for any queries on Monday - Saturday between 10:00 am - 7:00 pm.

    PNB MetLife Insurance, amongst the trusted Life Insurance companies in India, aims to provide a wide range of Life Insurance products that suits the needs of an individual at every stage of his life. Life Insurance Plans range from Term Life Insurance PlansTerm PlanProtection PlansLong Term Savings Plans , Retirement Plans & Child Education Plan.

    Site best viewed in following browsers
    Chrome 70+ , IE 11+, Firefox 76+, Safari 11+

    Get a Callback Get a Callback

    Ask khUshi

    Hi! I’m khUshi. How can I help you?