According to the Insurance Regulatory and Development Authority (IRDA) data, India’s largest life insurer LIC recorded around 142 per cent rise in its premium collections (Rs 12,528.07 crore) this November against the same period last year (Rs 5,182.50 crore).
The figures shared are post demonetisation. Even though the country witnessed a slowdown in economic activity due to cash crunch; life insurance companies reported a spurt in premium payments. Investors were perhaps using old currency notes for transaction. Huge deposits in life insurance were also being made to secure ‘cash’, as this is a tax-free investment.
Life Insurance policies are a safe channel to invest money, and secure your future with good returns. There are pension based schemes too—a good source for your retirement in-come. Fixed long term policies are also available. In case of an unexpected incident, your family members will have fool-proof financial security. Life insurance policy is purchased in consideration of your future requirements, including any mishap to the policy holder’s life. It is life-risk cover in consideration of your income and dependants.
From the regulatory perspective, there are many positive changes happening; such as more money pumped into insurance companies with decision on 49% FDI. Meanwhile, many demographic factors are driving the huge change, as far as life insurance is concerned. There is a huge middle class population in India, which is aware of health, wealth, and longevity. This may be due to access to better healthcare facilities, which is an off-shoot of health insurance stronghold in urban areas. So there is this burgeoning middle class population willing to protect their family and also have a sound retirement income base.
Another interesting point is the change in buyer psychology to secure ‘death’, a ‘prohibited’ subject in India for religious as well as superstitious reasons. But people have come forward to invest money in secured channels. One reason is the increased life-span, with private jobs not offering any pension; hence people have also adopted a smart approach to deal with the subject.
Smart tip: Amount (premium) paid by you for life insurance is deductible under section 80c of IT act. If you are also paying the premium for child insurance or your spouse’s family, then the amount will be adjusted for tax-savings (under section 80c of IT act). All types of insurance policies (private insurance policies also) will be considered valid proof for IT exemption, subject to your annual income.
(Advertiser-Sponsored Feature: A Marketing Initiative)