Life Insurance is a contract between an individual and an insurance provider where the insurer guarantees payment of a death benefit to beneficiaries in exchange for premiums. For business owners, it serves as a critical safety net, ensuring that business debts, employee liabilities, and family financial needs are met if the primary earner is no longer there.

Term Insurance is pure protection; it offers a high life cover at a very low premium but has no maturity benefit if the policyholder survives the term. Endowment Plans combine protection with savings; they provide a life cover and a lump sum amount (with bonuses) at the end of the policy term. At AccountSewa, we generally recommend Term Insurance for maximum family protection and separate investments for wealth creation.

Life insurance is one of the most popular tax-saving tools in India.

• Section 80C: Premiums paid for life insurance (for self, spouse, or children) are deductible from your taxable income up to ₹1.5 Lakh per year.

• Section 10(10D): The maturity amount or death claim received is generally tax-free, provided the premium does not exceed 10% of the sum assured.

Keyman Insurance is a life insurance policy taken out by a business on the life of a crucial employee (like a CEO, Lead Developer, or Partner) whose absence would cause financial loss to the firm. The premium is paid by the company and is treated as a business expense, while the claim amount helps the business navigate the transition or recruit a replacement.

standard thumb rule is the “Income Replacement Method,” which suggests a sum assured of at least 10 to 15 times your annual income. However, we also factor in your outstanding loans (like home or business loans), future expenses (children’s education), and current assets to calculate a precise “Human Life Value” (HLV).