more questions on term life insurance

POSTED BY maverick muguda ON March 23, 2013 7:28 pm COMMENTS (2)

Hi All,

 I have couple more questions on term life insurance.

 1) Is the death benefit of a term life insurance paid to the nominiee(s)(upon the death of the insured) subject to income tax? If so is it treated as one-time income.

2) are there any tax implications of discontinuing a term life insurance policy?

Thanks in Advance,

Maverick Muguda

 

 

2 replies on this article “more questions on term life insurance”

  1. Ashal Jauhari says:
    March 23, 2013 at 8:44 pm

    Dear Maverick, no matter the sum is received from personal insurance policy or from Govt. like death in railway accidents, the amount is free of income tax.

    As there is no surrender amount involved in a term plan, there is no tax implication in general. The only exception is the Return of Premium kind term policies, where there ‘ll be a surrender value & normal taxation rules ‘ll apply for surrender.

    Thanks

    Ashal

    Reply
  2. Ramesh says:
    March 23, 2013 at 7:36 pm

    No.
    No.

    Reply

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