Annuity policies come with an array of options Having decided to buy an annuity policy, you can choose from various options. Before that, let us look at the tax implications. Up to ₹50,000 per year of your annuity purchase price brings you a tax deduction under Section 80CCC of the Income-Tax Act, 1961. This is over and above the ₹1.5 lakh under Section 80C for life insurance policy premiums, Employee or Public Provident Fund and so on. Any contribution to the National Pension Scheme will also come under this ₹50,000 umbrella. On the vesting date, you can commute up to a third of the accumulated amount without tax and the balance is applied towards the annuity. The annuity itself, the...
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Selecting a Life Insurance policy is like selecting your life partner—it has to be perfect for you. One of the many vows of a marriage is to stand by your partner through the good as well as bad phases of life. For married couples, taking a Joint Life Insurance with their spouse is nothing but a way of strengthening the same promise. Under a Joint Life Insurance plan, you get the option to cover yourself and your spouse or alternatively, a business partner, under the same contract. So, instead of opting for two separate life covers for yourself and your spouse/business partner, you can choose to get multiple benefits for both of you under a single insurance plan. Under this insurance cover...
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Thousands of people who have taken out insurance policies to help their heirs pay Inheritance Tax bills could have increased, rather than reduced, the size of the debt to the tax man. The problem can be solved by filling out a simple form to put these policies 'in trust' - but experts are concerned that many people are unaware of the issue and its solution. 'It is a very common problem,' says Matt Pitcher, Inheritance Tax (IHT) specialist at independent financial adviser Towry Law. 'Probably 90 per cent of the people I see as new clients are in that situation.' Matthew Hansell, head of the private client team at solicitors Mills & Reeve, estimates that 'probably at least half' of new...
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When you think about life insurance, you probably think of coverage on a single life. That’s the most common form. If you and your spouse both get single life insurance from the same company at the same time, you might get a discount. Joint life insurance covers more than one person — generally two. There are two forms: The names aren’t pleasant but the coverage can be. With joint life insurane, the mortality rates for each person get combined using actuarial formulas. The result is an equivalent single age for a male non-smoker with similar mortality characteristics. Don’t worry about the details — you’ll see examples below. You can’t buy something called “joint life insurance...
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Is joint life cover best for couples? Term Assurance: pays out a lump sum if you die within the agreed ‘term’ (ie. the amount of time you’ve chosen to be covered for). Term Assurance is typically taken out to protect a mortgage and, as such, can come with a level, or decreasing, sum assured – the latter reducing as you pay off your mortgage. Whole of Life Insurance: pays out a lump sum when you die, whenever that is – as long as you’re still paying the premiums. Family Income Benefit Insurance: pays out a regular income, instead of a lump sum, to provide ongoing financial support for those who depend on you. You could also add critical illness cover to your life insurance policy...
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But what do you do if you split up with your partner? Life insurance can give you the precious peace of mind of knowing that any dependents will be financially secure in the event of your death. But if you are in a couple or partnership, should you opt for a ‘single’ or ‘joint’ policy? If you are in a relationship it might seem obvious to take out a joint policy, but this is not necessarily the best option. See below for the pros and cons of single and joint policies. A single policy or separate plans? Before deciding whether a single or a joint policy is right for your situation, it’s important to understand the differences between these two kinds of plan. If you opt for joint life cover...
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Life insurance is a financial safety net for a family if either spouse dies prematurely, but is it better for couples to take out a joint policy or to insure their lives separately? Financial reporter Harry Brennan has investigated the dilemma and found some key differences in the type of policy. Difficult He said: “It can be difficult for people to work out what type of cover is right for them and whether single or joint policies are best. “Choosing the best policy for you will depend on your own specific circumstances.” There are two main types of joint policy in which both lives are covered, but only one lump sum is payable on death. The most common is fixed term cover which has a time...
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When to buy joint life term insurance Some term life insurance policies provide you an option of getting either a single life cover or a joint life first death policy. Getting the latter can be a cheaper option if you want coverage that can protect surviving family members in case you or your spouse dies. How does Joint Life Term Insurance work? This kind of policy insures two people (spouses, business partners or any allowable relationship for a joint life policy) and provides a certain lump sum amount in the event that one of the insured persons dies. Joint Life First Death. This covers both lives (i.e. spouses) and pays the sum insured for the life of whoever dies first. Once the death...
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Life Policies: joint life and joint name policies: the situations that can arise and the Inheritance Tax claims that can result If the joint policyholders are the beneficial owners of the policy (and not merely trustees) difficulties can arise in determining what beneficial interest each has and therefore what claims for tax there are - particularly on the death of the first to die. There are three possibilities: the policyholders are beneficial tenants in common and the interest of the first to die passes under their will. In this case the share of the first to die forms part of their estate and, subject to exemptions, Inheritance Tax is payable on the value of that share - see IHTM20211...
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What life insurance is best for your joint mortgage? When you take out a mortgage we would always recommend you take out appropriate life insurance too, so that you know your monthly mortgage payments are covered if things go awry. If you’re buying on your own, a single life insurance plan will probably do the trick, but if you’re going into joint property ownership, a joint plan may be more appropriate. So, which is best for you? Property ownership When it comes to joint ownership, there are two main types: Single or joint life insurance? Given the differing types of property ownership, it’s important to look at your individual situation before taking out life cover. A policy taken out on...
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