Which Life Insurance Plans Offer 80C Tax Benefits — While Securing Your Family’s Future?

As the financial year-end approaches, most of us look for ways to reduce tax. But what if your tax-saving tool could also secure your family’s future?

Life insurance does just that — combining financial protection with tax benefits, especially under the old tax regime.

Let’s look at how life insurance plans help you save tax under Section 80C, in the old tax regime, while providing peace of mind to your loved ones.

Why Tax Planning and Protection Should Go Hand-in-Hand

Life insurance is a tax-saving instrument that brings something extra: assurance.

It offers:

• A life cover in case of an untimely event
• Long-term savings or investment options
• Deductions under Section 80C, up to ₹1.5 lakh annually (old tax regime only)
• Tax-free maturity under Section 10(10D)* (subject to certain conditions)

In essence, you get to save tax and safeguard your family’s financial future.

Life Insurance Plans That Qualify for 80C Benefits

Here are some types of life insurance plans that qualify for Section 80C deductions:

1. Term Insurance

• Term insurance plans provide pure life cover with affordable premiums
• Ideal if you're looking for high coverage at a low cost
• Premiums qualify under 80C

2. Endowment Plans

• Endowment plans or savings insurance plans combine savings with life cover
• Offers guaranteed maturity benefits
• Tax deductions on premiums, and in many cases, tax-free maturity

3. Unit Linked Insurance Plans (ULIPs)

• ULIPs give you market-linked returns with life insurance
• Suitable for long-term wealth creation
• Premiums eligible under 80C; maturity may be tax-free under 10(10D)

Additional Tax Benefits That Life Insurance Offers

• Tax-free death benefits: The payout to the nominee is completely tax-free.
• Top-up premiums on ULIPs: Still qualify for deductions under certain limits.
• Riders in insurance (like waiver of premium rider) enhance protection while also being eligible for deductions in some cases.

Who Should Consider Life Insurance for Tax Planning?

• Salaried professionals aiming to lower taxable income
• Freelancers with irregular income who want long-term financial structure
• Families looking for financial stability and peace of mind
• Mid-career investors combining growth with protection

Final Thoughts: Save Tax, Secure Tomorrow

Life insurance is more than a tax-saving tool — it’s a promise. A promise that your family won’t be financially vulnerable in your absence. And while you're alive and well, it’s your gateway to building wealth, reaching milestones, and gaining peace of mind.

At Bandhan Life, we help you choose plans that don’t just save tax, but also secure your ambitions and the people you love.

FAQs

1. What is Section 80C and how does life insurance help?

Section 80C allows you to claim deductions of up to ₹1.5 lakh annually on eligible investments, including life insurance premiums, but only under the old tax regime. This reduces your taxable income and saves tax.

2. Are all life insurance maturity amounts tax-free?

Most are, under Section 10(10D), but there are conditions that need to be met.

3. Which type of life insurance plan is best for tax saving?

It depends on your goals. Term insurance is affordable and offers high cover. ULIPs offer tax benefits along with investment. Endowment and guaranteed return plans offer savings with predictable outcomes.