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In the guise of tax-free fiction, in the next one month no less, traditional life insurance agents will move aggressively before being agents.

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For long term investment stick to your goal based plan of insurance and equity funds. The big announcement was made in the budget 2023 for insurance policies.

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From April 1, 2023, if the annual premium for traditional insurance plans like moneyback, endowment, etc. (but not ULIPs) exceeds Rs.5 lakh in a year.

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So the maturity amount will be taxed. Earlier, dependency of life insurance policies was 100 per cent tax-deductible, under section 10(10D) of the IT Act.

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And as long as the annual premiums did not exceed 10 years of the Sum Assured, the waiver was given in full.

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Hence premium plans above Rs 5 lakh are being pushed by many insurance agents to lock in tax-free adulthood status.

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In fact, many of my customers are being approached by their banks, who are aggressively trying to meet their sales targets by the end of March 2023.

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And it's not just the sales target. These plans offer very high coverage, sometimes up to 20-25 per cent of the first year's premium.

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So, it is quite clear why they would want you to buy it. But while the new taxation of these makes them more unattractive.

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