Something Important that an Insured should Know

An insurance policy that an individual has sought exemption in the previous years lapses, is canceled or surrendered, then the tax benefit that the individual has claimed will be negated and an aggregate amount of deduction allowed in previous years will be considered to be income for the individual in the policy cancellation or lapsation year. So, in case a policy lapses or is canceled, the Individual not only loses out on the policy benefits but is also taxed for the earlier tax benefits claimed under section 80C.

So, it is in the interest of the individual insured to continue with the policy, not only to save taxes but primary objective being he will still be covered towards any untoward incidents.