Life Insurance : The expense ratio on life insurance policies is also high, due to which the annual return gets even lower.
Apart from this, the inflation rate also affects the returns, due to which the actual return can go below zero.
Many people buy life insurance policies just to save tax. His agent tells that if you get the policy done then there will be big savings in the form of tax. If insurance agents want to take you under the same pretext, then do not rush.
In fact, under section 80C of Income Tax, a rebate of Rs 1.5 lakh is available annually on the premium of a life insurance policy. Taking the help of this, insurance agents impose heavy premium burden on you.
You should also be aware of this and look for other tax saving options. There are many such investment options, which give you more returns than the insurance policy. The cost of insurance policies is also high, due to which the returns are limited to 4-5 per cent.
In January-March, the Maximum Pressure is
on the insurance agent to sell the policy in January-March on behalf of their companies. Taxpayers also buy insurance policies in a hurry to invest, while they do not even need it.
Adil Shetty, CEO, BankBazaar.com says that the insurance policy is to cover your risk. It should not be seen as a tax saving option.
By Investing Here, You Can Get More Returns Than Insurance
Many savings schemes offered by the government give more returns than the interest received on the insurance policy. In this also you get Income Tax exemption under 80C.
Popular schemes are giving 7.6% return on Sukanya Samriddhi Yojana, 7.1% on Public Provident Fund (PPF) and 6.8% on National Saving Certificate (NSC).
Apart from this, mutual fund schemes like Equity Linked Savings Scheme (ELSS) also get tax exemption of 1.5 lakhs and can give returns of more than 10 percent.
