- High coverage at a low premium
- Financial protection for your family’s future
- Tax benefits up to Rs. 46,000`` under Section 80C and 10(10D)
- Dedicated claim assistance
- Customisable plans to suit your needs
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In summary
Key highlights
- Under the old tax regime, eligible premiums qualified for deductions under Section 80C of the Income-tax Act, 1961 (valid up to March 31, 2026). From April 1, 2026, it is applicable under the corresponding provision - Section 123 of the Income-tax Act, 2025.
- If you have added eligible health-related riders, you could claim deductions under Section 80D of the 1961 Act (up to March 31, 2026), and now you may claim deductions under Section 126 of the Income-tax Act, 2025 (effective from April 1, 2026), subject to the applicable conditions.
- If you opt for the new tax regime, you cannot claim deductions on your term insurance premium.
- Death covers paid to your nominee are generally tax exempt, earlier under Section 10(10D) of the 1961 Act (valid up to March 31, 2026) and now under the corresponding provisions under Section 11 of the Income-tax Act, 2025, subject to the applicable conditions.
- Understanding these rules can help you choose the tax regime that best supports both your protection needs and tax planning goals.
What is term insurance?
Importance of term insurance
Term insurance is a type of life insurance that provides financial protection for a fixed period, usually between 5 and 30 years. If the insured passes away during the policy term, the nominee receives the sum assured, helping the family manage their financial responsibilities.
One of the biggest advantages of term insurance is that it offers a high life cover at an affordable premium. This makes it one of the most cost-effective ways to protect your loved ones.
Many plans also let you strengthen your coverage by adding optional riders, such as:
- Critical Illness Benefit
- Accidental Death Cover
- Accidental Total Permanent Disability Benefit
- Waiver of Premium Benefit
Besides protecting your family financially, term insurance may also help you save tax if you qualify under the applicable provisions of the Income-tax Act.
Key benefits of term insurance plan
1. Financial protection for your loved ones:
Your family may still need to pay household expenses, children's education costs, rent, or EMIs if you're no longer around. A term insurance plan provides a financial cushion that can help them manage these expenses.
2. High life cover at an affordable premium:
Compared to many other life insurance products, term insurance offers a larger life cover at a comparatively lower premium. This allows you to protect your family's future without stretching your budget.
3. Flexible coverage:
You can customise your policy based on your needs by choosing:
- Your policy term
- Your sum assured
- Optional riders for additional protection
This flexibility helps you build a plan that matches your financial goals and responsibilities.
Benefits at a glance
| Benefit | How it helps you |
|---|---|
| Financial security | Helps your family manage expenses if something happens to you. |
| Affordable premiums | Gives you a higher life cover at a lower cost. |
| Tax savings | Eligible deductions are available under the old tax regime. |
| Flexible protection | Lets you add riders for broader financial protection. |
As your responsibilities grow, your insurance needs may change too. Compare plans and check your premium estimate to choose a cover that suits your current and future financial goals. Get quote!
What are the tax benefits of term insurance under the income-tax act?
The tax benefits available on your plan depend on the tax regime you choose.
If you opt for the old tax regime, you can claim deductions on eligible premiums and health-related riders, subject to the applicable conditions. If you choose the new tax regime, you cannot claim deductions on your term insurance premium. However, eligible policy payouts continue to receive tax benefits under the applicable provisions of the Income-tax Act.
Up to March 31, 2026, these benefits were available under the Income-tax Act, 1961. From April 1, 2026, the corresponding provisions are covered under the Income-tax Act, 2025.
Tax benefits on term insurance premiums
One of the key benefits of buying a term insurance plan is the tax deduction available on eligible premium payments under the old tax regime.
Up to March 31, 2026, policyholders could claim this deduction under Section 80C of the Income-tax Act, 1961. From April 1, 2026, the corresponding provision is Section 123 of the Income-tax Act, 2025.
You can claim a deduction of up to Rs. 1.5 lakh in a financial year on eligible premiums paid for:
- Your own term insurance policy
- Your spouse's term insurance policy
- Your children's term insurance policies
This deduction forms part of the overall deduction limit available under the applicable provision.
Apart from term insurance premiums, the same deduction limit also covers eligible investments and payments such as:
| Eligible investment/payment | Tax benefit |
|---|---|
| Public Provident Fund (PPF) | Eligible for deduction |
| Employees' Provident Fund (EPF) | Eligible for deduction |
| Unit Linked Insurance Plans (ULIPs) | Eligible for deduction |
| Equity Linked Savings Schemes (ELSS) | Eligible for deduction |
| Home loan principal repayment | Eligible for deduction |
| Children's tuition fees | Eligible for deduction |
| Life insurance premiums | Eligible for deduction |
Since the deduction limit is shared across different investments, it's important to plan your investments carefully to make the most of the available tax benefits.
Important: If you choose the new tax regime, you cannot claim a tax deduction on your term insurance premium.
Tax benefits on eligible health-related riders
If you have added eligible health-related riders to your term insurance plan, you may also be able to claim an additional tax deduction under the old tax regime.
Up to March 31, 2026, these deductions were available under Section 80D of the Income-tax Act, 1961. From April 1, 2026, the corresponding provision is Section 126 of the Income-tax Act, 2025.
Eligible health-related riders may include:
- Critical Illness Benefit Rider
- Hospitalisation Benefit Rider
Depending on your eligibility, you can claim:
| Category | Maximum deduction |
|---|---|
| Individuals below 60 years | Rs. 25,000 |
| Senior citizens | Rs. 50,000 |
These deductions are available only if the rider qualifies under the applicable tax provisions.
Tax exemption on policy benefits:
A term insurance plan not only helps you save tax on eligible premiums but also offers tax benefits on eligible policy payouts.
Up to March 31, 2026, these exemptions were covered under Section 10(10D) of the Income-tax Act, 1961. From April 1, 2026, the corresponding provision is covered under Section 11 of the Income-tax Act, 2025.
In the unfortunate event of the policyholder's death during the policy term, the nominee generally receives the death benefit without paying tax, subject to the applicable conditions under the Income-tax Act.
If the policy includes a maturity benefit and satisfies the prescribed conditions, the maturity proceeds may also qualify for tax benefits under the applicable provisions.
For policies issued on or after April 1, 2023, maturity proceeds may become taxable if the total premium paid during a financial year exceeds Rs. 5 lakh. However, this condition does not affect the tax treatment of eligible death covers paid to the nominee.
Additional tax benefits to consider
Besides helping you save tax on eligible premiums, a term insurance plan offers several other tax-related advantages.
- Tax-efficient financial protection: Eligible premium payments can help reduce your taxable income if you opt for the old tax regime.
- Tax benefits on eligible riders: Health-related riders may qualify for additional deductions under the applicable provisions.
- Tax-efficient death cover: In the unfortunate event of the policyholder's death, the nominee generally receives the death cover without paying tax, subject to the prescribed conditions.
- Tax treatment of eligible maturity proceeds: If the policy satisfies the applicable conditions, maturity proceeds may also receive favourable tax treatment.
Understanding these benefits can help you choose a term insurance plan that supports both your protection needs and your long-term tax planning.
Term insurance tax benefits: Old vs. new tax regime
| Feature | Old tax regime | New tax regime |
|---|---|---|
| Tax deduction on eligible term insurance premiums | Earlier was available under Section 80C of the Income-tax Act, 1961 (up to March 31, 2026) and now under the corresponding Section 123 of the Income-tax Act, 2025 (from April 1, 2026) | Not available |
| Tax deduction on eligible health-related riders | Earlier was available under Section 80D of the Income-tax Act, 1961 and now under the corresponding Section 126 of the Income-tax Act, 2025 | Not available |
| Tax treatment of eligible policy proceeds | Available as per the applicable provisions | Available as per the applicable provisions |
| Suitable for | Individuals looking to maximise eligible tax deductions | Individuals who prefer a simplified tax structure without deductions |
If your goal is to claim tax deductions on your term insurance premium, the old tax regime may be more suitable. If you've opted for the new tax regime, you won't be able to claim deductions on premium payments, although eligible policy benefits continue to receive tax treatment under the applicable provisions of the Income-tax Act.
Tax benefits on term insurance riders
Adding riders to your term insurance plan can enhance your financial protection by covering specific life events. Some riders may also help you save tax, provided they meet the eligibility criteria under the applicable provisions of the Income-tax Act and tax regimes.
The table below explains which riders may qualify for tax benefits.
| Rider | Tax benefit |
|---|---|
| Critical Illness Benefit Rider | May qualify for tax deduction under the applicable provisions. |
| Hospitalisation Benefit Rider | May qualify for tax deduction under the applicable provisions. |
| Accidental Death Cover Rider | Generally not eligible for a separate tax deduction. |
| Accidental Total Permanent Disability Benefit Rider | Generally not eligible for a separate tax deduction. |
| Waiver of Premium Benefit Rider | Generally not eligible for a separate tax deduction. |
To claim these deductions, keep your premium payment receipts and policy documents safely, and ensure the premium is paid through an accepted payment mode.
How can you claim tax benefits on term insurance plans?
Claiming tax benefits on your term insurance plan is simple if you keep the required documents ready and follow the applicable tax rules.
If you have opted for the old tax regime, you can claim deductions on eligible premiums and qualifying health-related riders while filing your income tax return.
Up to March 31, 2026, these deductions were available under Sections 80C and 80D of the Income-tax Act, 1961. From April 1, 2026, the corresponding provisions are Sections 123 and 126 of the Income-tax Act, 2025.
Follow these steps to claim tax benefits:
1. Keep your policy documents ready
Keep your policy document, premium receipts, bank statement, or insurer-issued payment certificate safely. These documents serve as proof of premium payment during tax filing.
2. Check your eligibility
Before claiming a deduction, make sure your policy and premium payments meet the conditions prescribed under the applicable provisions of the Income-tax Act.
3. Declare the premium while filing your income tax return
While filing your income tax return, enter the eligible premium amount under the relevant deduction section applicable to your tax regime and financial year.
4. Submit investment proofs to your employer
If you're a salaried employee and have opted for the old tax regime, you can submit your premium payment proofs to your employer during the financial year. This may help reduce the tax deducted at source (TDS) from your salary.
5. Keep all supporting documents
Retain your premium receipts and policy documents even after filing your return, as they may be required for future verification.
When can you not claim tax benefits for term insurance?
Here are some common exclusions you should know.
- You cannot claim deductions on term insurance premiums if you have opted for the new tax regime.
- Basic term insurance premiums do not qualify for deductions under the provisions applicable to health insurance riders.
- Riders that are not health-related, such as Waiver of Premium Benefit and Accidental Death Cover, generally do not qualify for separate tax deductions.
- Premiums that do not meet the prescribed conditions under the Income-tax Act may not be eligible for deductions.
- GST and other applicable charges are generally not included while calculating the deductible amount.
- Tax benefits are available only when all applicable conditions under the Income-tax Act are satisfied.
Understanding these exclusions can help you avoid incorrect tax claims and make your tax filing process smoother.
Conclusion
A term insurance plan does more than provide financial protection for your loved ones—it can also support your tax planning if you choose the right tax regime. Under the old tax regime, you can claim tax deductions on eligible premiums and health-related riders, subject to the applicable provisions of the Income-tax Act. If you've opted for the new tax regime, premium deductions are not available, although eligible policy payouts continue to receive tax benefits as per the applicable tax laws.
Understanding the available tax benefits, eligibility conditions, and claim process can help you make informed financial decisions. Along with protecting your family's future, a term insurance plan can play an important role in your overall financial planning.
If you're looking to secure your family's future, compare different term insurance plans, evaluate the coverage options, and choose a plan that aligns with your financial goals and protection needs.
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Frequently asked questions
Tax benefits on term insurance
Is term insurance premium deductible under Section 80C?
Yes. Premiums paid towards term insurance plans were earlier eligible for tax deductions under Section 80C of the Income-tax Act, 1961, which was applicable up to March 31, 2026. From April 1, 2026, with the implementation of the Income-tax Act, 2025, the corresponding provision is Section 123. Eligible premiums continue to qualify for tax deductions under Section 123, subject to the applicable conditions and only if the policyholder has opted for the old tax regime.
What is the Section 80C benefit on term insurance?
Under Section 80C of the Income-tax Act, 1961, policyholders could claim a tax deduction of up to Rs. 1.5 lakh on eligible term insurance premiums, subject to the prescribed conditions. This provision was applicable up to March 31, 2026. From April 1, 2026, the corresponding provision is Section 123 of the Income-tax Act, 2025, which continues to allow deductions on eligible premiums under the old tax regime.
Can I claim both 80D and 80C?
Yes, provided you meet the applicable eligibility conditions. Up to March 31, 2026, eligible term insurance premiums could be claimed under Section 80C, while premiums paid for eligible health-related riders could qualify for deductions under Section 80D of the Income-tax Act, 1961. From April 1, 2026, the corresponding provisions are Section 123 and Section 126 of the Income-tax Act, 2025. These deductions are available only if you have opted for the old tax regime.
What is the maximum tax deduction available under Section 80D for regular taxpayers?
Up to March 31, 2026, regular taxpayers below the age of 60 could claim a deduction of up to Rs. 25,000 under Section 80D of the Income-tax Act, 1961 for eligible health insurance premiums, including qualifying health-related riders attached to a term insurance plan. From April 1, 2026, the corresponding provision is Section 126 of the Income-tax Act, 2025, and the applicable deduction limits continue as prescribed under the law.
Can I still avail tax benefits on term insurance after cancelling the policy?
Tax benefits depend on the policy status and the applicable provisions of the Income-tax Act. If a term insurance policy is cancelled or discontinued, the tax treatment may vary depending on the policy terms and the applicable tax rules. It is advisable to consult a tax advisor to understand how the cancellation may affect any tax benefits already claimed or those proposed to be claimed.
Do you need to pay tax on term insurance maturity benefits?
A pure term insurance plan generally does not offer a maturity benefit. However, if the policy includes a maturity benefit or a Return of Premium feature, the proceeds may qualify for tax benefits subject to the applicable provisions of the Income-tax Act. Up to March 31, 2026, this was governed by Section 10(10D) of the Income-tax Act, 1961. From April 1, 2026, the corresponding provision is Section 11 of the Income-tax Act, 2025, subject to the prescribed conditions.
Is the payout received by nominees after death taxable?
No. In the unfortunate event of the policyholder's death, the death benefit received by the nominee is generally exempt from tax, subject to the applicable provisions of the Income-tax Act. Up to March 31, 2026, this exemption was available under Section 10(10D) of the Income-tax Act, 1961. From April 1, 2026, the corresponding provision is covered under Section 11 of the Income-tax Act, 2025.
Can you still claim tax benefits on term insurance under the new tax regime?
No. If you opt for the new tax regime, you cannot claim tax deductions on your term insurance premium or eligible health-related rider premiums. Tax deductions under Section 123 and Section 126 of the Income-tax Act, 2025 are available only if you choose the old tax regime. However, eligible policy payouts continue to receive tax benefits under the applicable provisions of the Income-tax Act.
Is GST on term insurance premiums allowed as a tax deduction?
No. GST paid on term insurance premiums is generally not eligible for a tax deduction under the Income-tax Act. Only the eligible premium amount, excluding GST and other applicable taxes or charges, may qualify for tax deductions under the applicable provisions, subject to the prescribed conditions.
