6 min read
Updated on Jan 30, 2023
LIC (Life Insurance Corporation of India) is perhaps the biggest provider of insurance policies in India. It was created on 1st September 1956 by the government of India. It presently has over 290 million policyholders to be precise, which is a staggering number by any count. The GST (goods and services tax) regime has come into being from 1st July 2017. Term Life Insurance has been one of the many areas that have been affected by the same.
For many different kind of policies, the applicable tax rate has gone up by 3%. This has also caused a fair amount of confusion among many policyholders as they often do not know the tax rate that would be applied to their policies. They also want to know how much premium they would have to pay apart from the tax. So, you must know the installment premium without tax so that you can calculate the money you would spend on the policy. This would also help you judge if the returns on the policy are good enough or not.
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The tax that you pay on your policy depends on the type of policy that you buy. So, as such, it is an important factor when you want to know how to calculate LIC premium without tax. The policies sold by LIC can be categorized into three categories – term insurance policies, unit-linked policies, and endowment policies.
Thus, if you want to know the LIC installment premium without tax you should know how the taxes apply on the same.
Do you want to know how to know LIC premium without tax? Then this is a table that should be of interest to you:
|Type of insurance||The previous tax rate under the service tax regime||The new tax rate under the GST regime||The area where the tax is applied|
|Term plans||15%||18%||premiums paid for every year of coverage|
|Endowment plans||3.75%||4.50%||single-premium or first-year plans|
|Endowment plans||1.88%||2.25%||premium renewal|
|ULIP (unit-linked insurance plan) plans||15%||18%||charges for fund management and premium|
|Annuity plans||1.50%||1.80%||both regular-premium and single-premium plans|
So before you try to find out what is installment premium without tax in LIC you must understand how GST has affected the premiums that you pay for your life insurance policies. We hope that the data provided in the table above would be helpful in this regard. As you can see from above, GST has had a say on both ULIP plans and term plans among the life insurance plans. It has affected several other forms of insurance as well.
This would show you the basic premium of the policy and the taxes that would be applicable for the same. So, if you want to know the LIC premium without tax this is the way that you would have to go about it.
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There are two major ways in which you can pay the premiums of these policies – in installments and at one go. In the first case, knowing the installment premium without tax would be helpful for you as far as planning your finances is concerned. You can pay the premiums once each quarter as well. Before the internet came about people would simply queue up outside the LIC offices nearest to them to pay their premiums.
Also Read: Section 139 (1) of the Income Tax Act
However, thanks to the emergence of the internet it has now become so much easier to pay the premiums. The same can also be said of finding out your LIC installment premium without tax. It must be said that phenomena like internet banking have made the entire process so much more convenient than it was earlier. As we have said already, LIC has an official website where you can log on and pay your premiums in any way you want to. The most popular options, in this case, are debit card, net banking, credit card, and UPI (united payments interface), to name a few.
LIC premium can be calculated using an LIC premium calculator, a tool which is easily available online. All you need to do is enter your details on the online calculator tool, such as the type of plan, age, term of the policy, and the sum assured. The tool would auto compute the premium amount for you.
LIC installment premium refers to the amount payable by the policyholder to the insurance company in regular installments, such as monthly, quarterly, every six months, or annually. In return for the premium installment, the insurer promises to provide coverage (maturity benefit) to the policyholder.
The first step is to use the LIC premium calculator online to determine the LIC premium amount for the intended plan. With the same calculator tool, the installment premium payable without tax can be computed. This is also known as the basic premium.
In order to calculate the LIC premium payable in installments, you can follow these steps on the official website of LIC India:
> Click on the premium calculator tool available on the website www.licindia.in
> You would be required to fill in your basic details such as name, age, date of birth, gender, mobile number, country code, email ID, and the like.
> Next, click on the Quick Quote tab.
> You’d then be asked to choose your plan of choice from the various plans displayed.
> Click on coverage and enter the details required, such as sum assured, term of premium payment, additional coverage required, and the like.
> Click on Quote and you will be able to see the computed premium.
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