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The life insurance industry in India is the largest in the world. The collective amount of people from about 200 countries across the world is less than the total amount of people insured in India. Don’t be surprised after reading these statistics, India still is under-insured.
The penetration of life Insurance in India, the ratio of premium funded in a year to the GDP was hardly 3.17% in 2012. This still doesn’t mean that the life insurance space in this country is stagnating. Life Insurance remains one of the fastest growing industries in India as is expected to grow at a compound annual growth rate of about 12-15 percent by 2020.
Why Invest in Life Insurance Post Budget 2014-15?
Life insurance is one of the most important tax saving instrument that provides various plans like term plan, savings, investment, as well as retirement plans which could be the most feasible tax saving options.
After the 2014 budget, it is expected that with an enhanced flow of foreign capital and international expertise, we could see a growth in the development of the insurance industry. This acceleration could be triggered by increased access to global insurance products, distribution channels and top-notch business practices. The 2014-15 budget is expected to have a positive impact in the overall development of the insurance sector in India as well as the fast growing health insurance sector.
The existing Income tax rules allow for an annual exemption of Rs. One Lakh in investments and expenditures including life insurance and home loan repayments. This rule hasn’t seen much of a change for about a decade now. Such investments, along with public provident funds (PPF), employee provident funds (EPF), term deposits and equity-linked mutual funds are most suitable investment tools for people that help in keeping the economy on a strong footing.
Investing in Life Insurance. Does it Really Help?
Sure it does. But, raising the Rs. One Lakh limit and improving the number of ways to invest it in exchange for a tax credit would be more beneficial as people could save more money. It would also allow people to invest this amount in ways that would indirectly benefit the economy, even if it were to hit government revenue in the beginning.
HDFC Life, one of the leading life insurance companies in India, offers a range of options to suit different requirements, all serving one purpose, securing one’s family’s wellbeing and financial stability. Choosing one of the HDFC Life’s life insurance plans serve to be the best way to save tax. As per section 80C, you could save upto Rs. 46,350/- on investment of Rs. 1,50,000/- on all life insurance plans provided by HDFC Life. For people with very high tax bracket, such tax benefits offered by a life insurance policy would be more valuable.
Life Insurance is no more just a tool to save tax; it is a necessary financial instrument. After all, the whole point of insurance is to ensure your dependents have enough to sustain financially if something were to happen to you. Today, policy holders are more knowledgeable than ever and more aware of their rights as consumers. Each policy is different; it is upto the customers to decide what works for them before they buy it.
About HDFC Life
HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.
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