Even Without Sec 80 C, Life Insurance Is A Must-Have

A chunk of the insurance market is made up of savings and investment products. Though taxpayers will not be able to enjoy Section 80C benefits if they opt for the new tax regime, maturity proceeds under Sec 10 (10 D) will remain exempt from tax.

- Rajalakshmi Nirmal

In a Twitter poll, 30 per cent of the 200-plus people who responded to a question on why they buy insurance said it was for tax benefit. If you also have the same thought, read on.

While it is good to be positive in life and think that you would live 100 years, you should also realise that many things in life are out of one’s control.

To make sure that your dependants don’t suffer financial trauma when you are not around, you must buy life insurance. Tax benefits under Section 80 C of the Income Tax Act was a carrot to prod people to buy life insurance as an individual who survives the term of life insurance policy doesn’t get any return.

Now, with the Budget proposing lower tax rates for people who do not claim deductions under Section 80 C, it makes insurance less attractive. But given the purpose that insurance serves, one should not overlook it.

Also, given that even today, life insurance policies with the saving component are the best avenues for people with a low risk appetite to save money, they should not be abandoned.

Here are three reasons why you should buy life insurance — as a pure protection cover and also as a savings instrument.

Benefits of term policies