Terms of investments
Premium: Fixed amount is payable as premium every year Returns: In case of traditional policies, bonus is declared at the end of each year, usually in the range of 5% of sum assured. In case of unit-linked policies, returns are linked to market returns.
Availability
Eligibility: Individuals
Available at: Insurance companies
Tax benefits
IT Section applicable: 80C
Limit on investment: Upto Rs 1 lakh for life insurance policies and Rs 10,000 for pension policies
Conditions: Sum assured must be at least 5 times of annual premium
Death benefits: Tax free
Maturity proceeds: Tax free after 3 years if above condition is fulfilled
Liquidity
Premature withdrawal: In case of traditional policies, premature surrender value is very high. In case of unit-linked policies, tax-free withdrawals can be made after 3 policy years.
Loan: Loans against policy available
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