Best Income Tax Saving Schemes

For me, investing in life insurance is like weaving a credible safety net to be prepared for unforeseen yet possible shortcomings in life such as death, accident, chronic illness, and many more. 

Apart from being prepared for negative hits, life insurance also helps build a reliable foundation for happy and happening events such as marriage, childbirth, and educational needs in the family. 

But, life insurance is also a beneficial tool that helps you live a tax-free life by paying the insurance premiums. Put the money in the right place to help you when you are in your desperate times. 

This blog will help you understand the importance of life insurance and choose India’s best possible tax-saving schemes.  

What is Life Insurance? 

  • India had an overall density of US$78 in FY21.
  • According to analysts, the life insurance sector is expected to increase at a CAGR of 5.3 percent between 2019 and 2023.
  • In FY21, India’s insurance penetration was 4.2% (3.2% for life insurance and 1.0% for non-life insurance)
  • According to the Insurance Regulatory and Development Authority, the life insurance firms’ new premium income increased by roughly 4% to Rs 30,009.48.

Life insurance is a safety net that happens to save you from the hardballs that life throws at you. 

Basically, life insurance is a legal contract between an insurance company and policy holder, where the holder pays money to the insurer for a specific set of time, and later, the insurance company pays a sum of money in exchange for a premium, when the policyholder meets with an untimely death or unfortunate happenings.

There are different types of life insurances, and they are as follows:

Term Insurance Plans: As the name suggests, it is a type of life insurance that one buys life insurance for a specific period. Under this life insurance policy, if the policy holder dies during the selected term plan period, the death benefit will be paid in a lump sum.

Apart from having death benefits, it is also beneficial life insurance relatively less expensive than permanent life insurance. There are other added benefits too.

United Link Insurance Plans (ULIP): Under this insurance umbrella, the policy holder gets the leverage to invest their money and let it grow over time to beat inflation. It is also a safe investment choice for people looking to develop a financial corpus.

Whole Life Insurance Policy: As the name suggests, it’s a long-term insurance policy. Here, the death benefit is paid to the beneficiary in the policyholder’s untimely death. However, if you hit a century, you are entitled to a maturity bonus under a whole life insurance policy.

Health Insurance: This insurance policy gives you a safety net from unwelcomed health expenses. 

Endowment Plans: If you want to weave a long-term plan for yourself and your family, this could seal the deal offer that might help you accomplish multiple monetary goals at the family level. Moreover, if you outlive the policy’s term, you will also get the maturity amount.

Retirement Plans: This is the key to nirvana if you want to secure your post-retirement life. It offers financial stability and aids in the accumulation of wealth after retirement. You will receive a lump sum of money as a pension from the selected Plan during the investing period. 

Savings Plans: As the name suggests, this life insurance policy assures you with a saving kitty that could either be long-term or short. It ensures your family with a certain sum of money that they could use when life hits any uneasy event. 

Child Insurance Plans: Who would not bother to secure their child’s future? When a child is born, parents have multiple things to plan, and their education is one such thing. Under this life insurance policy also there will be numerous things that one needs to look at before buying a plan. 

What are the benefits of Life Insurance?

Some think that life insurance is just additional apparel, whereas life insurance is necessary. Life insurance is not only a tool that could give you death benefit but has several other positives such as:

  1. Save Taxes
  2. A safety net in the testing times 
  3. Return on Investment
  4. Back-up in different stages of life 
  5. It helps in taking loans.

What are the 4 Best Tax Saving Life Insurance?

As there are a plethora of life insurance policies, let me make your job easy by providing you with well-researched and best tax saving schemes in India, and they are as follows:

Aditya Birla Sun Life Insurance DigiShield Plan

Like different people have their various necessities and requirements in life, ABSLI’s DigiShield ‘Sabka Vala Term Plan’ pans out a single solution for all by having over 10 Plan Options (each having their bunch of boons).

  1. Level Cover Option
  2. Increasing Cover Option
  3. Sum Assured Reduction Option
  4. Whole Life Option (Level Cover)
  5. Whole Life Option (Sum Assured Reduction Cover)
  6. Income Benefit
  7. Level Cover plus Income Benefit
  8. Low Cover Option
  9. Level Cover with Survival Benefit
  10. Return of Premium (ROP)

Features and benefits of this Policy are as follows:

  • The minimum admission age is 18 years old. From 1 to 100 years old can be protected and supported under this comprehensive term insurance policy.
  • When you reach the age of 60, you have the option of receiving a monthly survival benefit. It means you don’t need to ask others for monetary help when you have it in your kitty.
  • The death benefits might be paid out in monthly payments, lump amounts, or both.
  • Talking about maturity benefit, it shall vary depending on the Option plan chosen.
  • Terminal Illness Benefit: According to this feature, if you are diagnosed with a critical illness during the policy term, up to the age of 80, and the Policy is still in effect, you will receive a lump-sum payment of 50% of the applicable amount assured on death, up to a maximum of Rs. 2 crores, and all future premiums will be cancelled.
  • Survival Benefit: This favourable feature ensures that a monthly Survival Benefit of 0.12 percent of the Sum Assured is paid beginning with the first Policy Month Anniversary after the incident and continuing until the conclusion of the Policy term or the death of the life Insured. Always refer to the Plan Option you purchase.
  • Death Benefit: Under this benefit, if the policy holder dies unexpectedly within the active Policy Term, the death benefit will be paid to the nominee (s)/legal heir(s) selected by the policyholder.

Aditya Birla Sun Life Insurance Life Shield Plan 

It is also an inclusive plan that allows you to prepare a haven for your loved ones even in your absence. This Policy comes with 8 plan Options, and they are as follows:

  • Level Term Assurance
  • Level Term Assurance with Waiver of Premium (WOP) Benefits
  • Increasing Term Assurance
  • Increasing Term Assurance with Waiver of Premium (WOP) Benefits
  • Decreasing Term Assurance
  • Decreasing Term Assurance with Waiver of Premium (WOP) Benefits
  • Return of Premium
  • Return of Premium with Waiver of Premium (WOP) Benefit

Features and benefits of this policy are as follows:

  • Joint Life Protection: How to double secure your life when your spouse accompanies you? This ABSLI Life Shield Plan benefit feature allows you to accompany your wife in the Plan to solve this issue. Your spouse’s relevant Sum Assured will be half of your applicable Sum Assured.
  • Enhanced life stage protection: Here, you expand your policy coverage following the occurrence of each of the events such as marriage and children (without having to take a medical exam).
  • Inbuilt Terminal Sickness Benefit: If you are diagnosed with a terminal sickness during the period of your policy, you will get 50% of the appropriate Sum Assured on Death, up to Rs. 2.5 crore, promptly, and the remaining premiums on your Policy would be waived. Beneficial, right?
  • Waiver of Premium: In this feature, if the life insured suffers from total and permanent incapacity or severe illness during the policy period, future premiums will be waived. Here, the policy’s death benefit will be untouched.
  • Then, there are other customizable benefits, and the riders come with extra cost.

Want to know more about this inclusive Plan, then read about Aditya Birla Term Insurance Plan.

Aditya Birla Sun Life Insurance Savings Plan

If you live wise, then life insurance should be part of your kitty. 

If you fall between 18 – 50 years, you can consider this a safety net for you and your family members. And its maximum maturity age is 70 years.

Features of this policy are as follows:

Death Benefit: If the policyholder dies within the policy period, a predetermined death benefit will be paid to your beneficiary, and once the death benefit is paid, the policy will be cancelled. Whereas, if the policyholder dies due to an accident during the policy period, then an Accidental Death Benefit will be paid to your beneficiary along with the death benefit.

Beneficial Addition: In this feature, the policyholder will enjoy guaranteed additions of 40% of the Sum Assured towards the end of the year for the first five years, given that all due premiums are paid.

HDFC Life Click 2 Protect Plus

Need comprehensive life insurance that could wear multiple caps at the time of unfortunate and happy happenings in life? Then, this could be an excellent option to hold onto. 

The benefits and features of this policy are as follows:

  • You can be part of this policy between 18-65 years.
  • Accidental Death Benefit: Here, It adds an amount assured to the lump payment provided on death. 
  • Income Option: This provision covers 10% of the money insured on death, with the balance paid out monthly for 15 years.
  • Income Plus Option: This option gives a death benefit of 100% of the sum promised and a monthly arrears payment of 100% of the money assured.


Having life insurance is very important, and these are some of the best life insurance policies that one can consider buying in 2021-22. Therefore, don’t forget to have one of the best life insurance because catastrophe doesn’t knock and come. 

Better safe than sorry!