Income Tax Benefits in Single Premium Life Insurance Plans It is importa...
Whenever anyone purchases a life insurance policy, he would always want to know how much money would be due to him and when. That is the precisely the reason behind purchasing the same. The most common types of claims are Death Claim and Maturity Claim. This applicable in all life insurance policies except pure term insurance plans which do not have a Maturity Benefit.
Maturity Claim is associated with the Maturity Benefit of the Policy i.e. the claim which arises when the policy matures. It simply means that when the policy completes its tenure, a certain amount of money called Maturity Claim amount is settled towards the life assured. It is paid only if the policy completes its due course of time and the policy has been continued properly, i.e. all due premiums have been paid on time.
The procedure of paying Maturity Claim is the simplest among all claims, where the life insured needs to fill up a form called the policy discharge form and the maturity amount is paid out without much hassles. The money is usually paid out before the maturity date once the policy discharge paper is duly filled and submitted long before the date of maturity. Normally, the insurance company would send you the claim form well in advance of the policy maturing.
Money received from Maturity Claim is tax free as per the current income tax laws.
Let us understand with an example:
Manish Chawla purchased a Life Insurance Traditional Policy where he would have to pay a premium of Rs 15000 p.a. for 20 years. If he died within the tenure, his nominee would be paid Rs 15,00,000 as Death Benefit and if he survives the policy term of 20 years, he would receive a sum of Rs 5,59,000 as Maturity Benefit.
Thus, at least 3 months before the Maturity Date, a Policy Discharge form is sent to Manish Chawla, which he needs to fill up, sign and send across to the insurance company’s office so that the Maturity Claim is paid out on time. A post dated cheque of the maturity amount would reach his house at least a month before the date of maturity so that he can bank it and receive the Maturity Claim on time.