Become a Certified GST Practitioner in just 58 hours. Register Now!

Term insurance is investment or expense

Kamlesh Shah (MS NAV Consultant) (45 Points)

24 May 2017

Hello Experts, I have confusion on Insurance. Is Term Insurance is Investment or Expenses, in both Scenario we can claim US 80C? and also same we did Mediclaim for Labour it is alos u/s 80D? both insurance are done for Labour.

Reply
Follow
Share

7 Replies

rocky (accountant) (953 Points)
Replied 24 May 2017

you should show that as expenses
because deduction under section 80c and 80d is only allowed on insurance for yourself or family members

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

PRABIR PAUL (*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.) (1448 Points)
Replied 24 May 2017

1) If the policy is yours:-

Premium paid on insurance policy is not your expenses it's your asset.

2) If the policy is not yours. it's your labour's and you paid the premium.

In this case it become your expenses because this policy is not yours and you don't get this amount.

3) Premium paid for labour in lic & Mediclaim is not allowable to take the deduction benefit U/s 80C and 80D.

1 Like

Kamlesh Shah (MS NAV Consultant) (45 Points)
Replied 24 May 2017

Hi,

Thanks for your Valuable Reply.

I would like to add some more Query in your answer.

1. Company is Propritorship. and they have done Mediclaim for Labour. and same They have did group Insurance. as term insurance basis.

now this is investment or Expenses.

rocky (accountant) (953 Points)
Replied 24 May 2017

ecpenses
debit to head. labour insurance whether this is medical or term insurance

PRABIR PAUL (*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.) (1448 Points)
Replied 24 May 2017

premium paid for labour is your expenses whether it is Sole proprietorship or other than Sole proprietorship.

Upgrade to CAclubindia Pro. Subscribe Now!

Prahlad Rai Sharma (63 Points)
Replied 25 May 2017

It is a business expenditure.
And no deduction can be taken u/s 80C n 80D because it can only be claimed for self or family members.

Supriya Singh (10 Points)
Replied 30 December 2024

Term insurance is primarily a protection tool rather than an investment. It is an expense that ensures your family’s financial security in your absence, offering a high sum assured at a nominal premium. Unlike investment-based insurance products, term plans do not provide maturity benefits but focus on fulfilling your dependents’ financial needs, such as covering debts, education costs, or daily living expenses.

Policybazaar has simplified the process of choosing policybazaar term insurance plans, providing an easy-to-use platform where you can compare plans from top insurers. Their excellent service, detailed guidance, and transparent comparisons make selecting the right term plan hassle-free and efficient.

The key benefits of term life insurance include financial stability for your family, tax deductions under Section 80C, and optional riders like critical illness or accidental death coverage for enhanced protection. While it may not offer returns like investments, term insurance provides invaluable peace of mind and a safety net for your loved ones.

With Policybazaar’s wide array of term plans, you can choose one that fits your needs and budget, ensuring that your family’s future remains secure. Think of term insurance as a smart expense to safeguard what matters most.