Is Claim Amount Taxable in Term Insurance?

What Is Term Insurance Claim Amount?

Is a Term Insurance Claim Amount Taxable?

When Is Term Insurance Claim Amount Not Taxable?

FAQs About Term Insurance Claim Amount:

Is it essential to pay GST on term insurance claim amount under Section 80C of the Income Tax Act? up-arrow

You will not have to pay any GST on the claim amount of the term policy. However, you will have to pay a GST of 18% and other relevant taxes on term insurance premium under Section 80C of the Income Tax Act.

Can you enjoy tax benefits on discontinuing the term insurance policy? up-arrow

Once you stop paying the premiums, your policy gets automatically terminated. Under such circumstances, you will not be eligible for a tax benefit if you raise a claim. Also, your nominee won't be able to receive a tax benefit on the claim amount in case of any unfortunate incident.

Who can be the nominee for a term insurance policy? up-arrow

In a term insurance policy, a nominee is a person who receives the sum assured based on the policy terms and conditions. Now, you can choose your spouse, parents, children or even siblings as a nominee at the time of purchasing a term insurance policy. This way, you can provide them with financial security in case of your untimely demise.

Which health-related add-ons are applicable under section 80D? up-arrow

Some of the health-related add-ons that are applicable under section 80D are Critical Illness, Hospital Care Rider, Surgical Care, and so on.