Life insurane pention plan after maturity is that income is taxeble ?

Question

Life insurane pention plan after maturity is that income is taxeble ?

Answer 1

Yes, the pure pension factor received annualy (annuities) is taxable.

However, I design plans whereby, you can receive these pensions tax-free.

I am a professional insurance consultant based in Mumbai. Contact me for further details.

Bhushan Sheth

[e-mail]

09322197831

Answer 2

If you are asking about a life insurance pension plan in the USA:

If the cash value in a life insurance policy is to be used as a retirement, and your employer paid the premiums as part of your compensation package, this is referred to as deferred compensation. In this case ALL proceeds from the cash value will be taxed as ordinary income.

If you paid the premiums for the policy, and decide to use the cash value as a retirement, the interest only will be taxed; not the total amount, unless this policy was part of a 401K pension, and your premiums were after-tax dollars, whether or not your employer contributed. In this case, all of the proceeds from the cash value will be taxed.

Even a "Certified Freelance Insurance Advisor" is giving out erroneous information. She needs to study life insurance some more.

Answer 3

On maturity you may receive 1/3rd amount by commutation. This is not taxable but Pension you receive on the other 2/3rd is treated as salary income and is taxable.

Answer 4

sir,

only pension is taxable

Answer 5

Yes,the amount you receive on maturity in the pension plan is taxable.

In most insurance plans you get the tax benefits. These benefits are:

Under section 80(C) : By this tax benefit we can get deduction in your income tax upto 1 lac.

Under section 10(10D) : By this tax benefit we can get the whole amount of insurance on maturity tax-free.

                  In most of the Insurance plans there is a SUM ASSURED i.e. Death Benefit. To maintain the provision of sum assured in the insurance plan Insurance companies deducts Mortatlity charges from the premium amount,that is why at the maturity they provide whole amount tax-free by providing the benefit of 10(10D).

                  In pension plans or money-back plans there is no provision of sum assured and there are no mortality charges applicable. That is why at the time of maturity amount of fund-value is taxable without 10(10D) benefit.

                  Kindly consult with your insurance broker properly because if the pension plan you bought is added with sum assured then amount of fund-value would be tax-free.

Shantesh Arora

Head-N-Tail

A better vision to Ultimate Soutions

9988447157

Amritsar.

Answer 6

No that is not taxable because of the plan nature. go ahead