Image Credit by Google
In the guise of tax-free fiction, in the next one month no less, traditional life insurance agents will move aggressively before being agents.
Image Credit by Google
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.
Image Credit by Google
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.
Image Credit by Google
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.
Image Credit by Google
And as long as the annual premiums did not exceed 10 years of the Sum Assured, the waiver was given in full.
Image Credit by Google
Hence premium plans above Rs 5 lakh are being pushed by many insurance agents to lock in tax-free adulthood status.
Image Credit by Google
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.
Image Credit by Google
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.
Image Credit by Google
So, it is quite clear why they would want you to buy it. But while the new taxation of these makes them more unattractive.