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Tax Saving with Life Insurance - Section 80C

 

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Planning is indispensable for life's uncertainties and financial planning is of vital importance across all demography.

A person goes through various life stages, in which, he/she would have requirements of different financial products.

It is not so difficult to get answers to questions such as — What do you want to do three years from now? Will you own a house? Will you have a family? But everyone stops in their track with one question – What happens to your family if you are not there to provide for them? Are you protected for such an eventuality? A basic financial pyramid structure involves four levels — protection, savings, growth (creation of wealth) and risk (indulge in connoisseur hobbies). Financial planning includes risk management, insurance, asset acquisition and liability management. The most important and vital among them is life insurance. Life insurance, if done properly, will ensure that life will go on smoothly to cater to your needs at different life stages and also for the family with or with out you. It is designed to protect against the uncertainties of life, to ensure a disciplined savings for life stage needs, insures against the risk of living too long and also takes care of inflationary changes.

Customers also benefit from the power of compounding by saving in life insurance prudently over a long term.

Typically, according to life stage needs, a young professional should first start with building a strong financial base by protecting himself and his family of unforeseen

Are you protected for such an eventuality?


A basic financial pyramid structure involves four levels -protection, savings, growth (creation of wealth) and risk (indulge in connoisseur hobbies). Financial planning includes risk management, insurance, asset acquisition and liability management. The most important and vital among them is life insurance. Life insurance, if done properly, will ensure that life will go on smoothly to cater to your needs at different life stages and also for the family with or with out you. It is designed to protect against the uncertainties of life, to ensure a disciplined savings for life stage needs, insures against the risk of living too long and also takes care of inflationary changes.

Customers also benefit from the power of compounding by saving in life insurance prudently over a long term.

Typically, according to life stage needs, a young professional should first start with building a strong financial base by protecting himself and his family of unforeseen circumstances. The reason being, if one lives a normal life, he/she will have all the time to save for the future, but in the case of an eventuality, only life insurance can ensure a life of dignity for their loved ones.


In the next stage when he's married and has responsibilities, he should consider traditional endowment policies, savings plans and eventually plan for his children's education/ marriage. Later, when he is also looking at creating wealth, he should invest in investment-oriented plans.

One may still ask why life insurance and why not any other financial instrument. Well, apart from the obvious benefits of disciplined and structured life stage based savings and protection, it also provides for coping against inflation. The present rate of inflation is about 9 per cent, and one must understand the inflation is negative compound interest. It is important to follow the above stated route to own a safe financial portfolio. According to a recent study - annual inflation of 7 per cent over 20 years means a sum of Rs 3,00,000 today will have a purchasing power of only Rs 70,271 by 2023. The compounding interest in your life insurance product helps you tackle inflation and help your retirement plans you accumulate wealth.

Most people buy life insurance not for life cover or long term wealth creation, but to benefit from tax. Yes, life insurance products also help in tax benefits, but it should be bought not solely for that reason. If tax benefits associated with insurance get taken away, do we stop buying insurance?


It is important to realise that life insurance is the only product that provides long-term financial product that provides long-term savings and protection.

The goal of buying a life insurance should be to maintain the standard of living and ensuring the dignity of the family in case of any unforeseen situation.

 

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

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