Thursday, February 18, 2010

K.R.S.Krishnan, Thiruvananthapuram

LIC- Jeevan Suraksha Endowment Policy

LIC’s Jeevan Suraksha Endowment Policy used to be a very popular life-cum-endowment scheme for salaried class. The scheme was made popular largely due to its premium being exempt from tax, albeit with a ceiling of Rs.10000 (under section 80 CCA of IT Act), whatever in excess being exempt under 80C.
The attraction to join the policy came from the fact the tax exemption of Rs.10000/- was always over and above the ceiling admissible under 80C, which is now Rs.1.0 lakh. Now the separation of the payment of this premium has been done away with. With most salaried class now covering or exceeding the ceiling of Rs.1.0 lakh, thanks to mandatory savings/expenditures under PF, group insurance schemes, housing EMIs, interests paid for educational loans etc., virtually, this would mean a loss of tax savings of Rs.3000 plus surcharges thereof.
The above savings of Rs.3000 is one of the major factors that is considered by the small investor, while joining the Jeevan Suraksha Policy. This has been upset by the Finance Ministry during the budget presented in the year 2006. All the policy holders were in the hope that this decision will be reversed sooner or later, considering the hardship caused to the existing policy holders. Surprisingly, there had been no substantial discussion on the subject, either in the media or financial circles, let alone LIC taking up the responsibility to restore the benefit.
This amounts to betrayal of faith on the part of both LIC and the Government that a promised benefit has been snatched away, causing substantial loss to the existing policy holders, who have to pay the premia, till the policy matures – this could be several decades in some cases.
It is therefore, requested that the original benefit of considering the insurance premium under Jeevan Suraksha endowment Policy over and above the rest of the 80 C investments, may restored with retrospective effect, at least for those existing policy holders. Considering that the major beneficiaries are the salaried class, or small investors, this should be done without any further thinking on the subject.
Dr.K.R.S.Krishnan

Senior Executive Director (R&D and Strategic Planning)

HLL Lifecare Limited

HLL Bhavan

Poojapura

Thiruvananthapuram - 695012 I

Kerala

Tel: +914712350607 (D) +919947772580 (M) I Fax: +914712358992

E-mail: krskrishnan@lifecarehll.com krs.krishnan@gmail.com
Dr.K.R.S.Krishnan is presently Senior Vice President in HLL Lifecare Limited (HLL), a central public sector enterprise under Government of India. He leads the Strategic Planning as well as the R&D Division of the company. He holds doctorate degree in engineering from IIT, Delhi.
He started his career in the Corps of Engineers (1997-1983). After a short stints in the central design organization in the Kerala State (1984-1987) and Indo-Dutch Cooperation Project (1987-89), he became a scientific officer in Department of Science and Technology, Government of India becoming its Adviser (1989-2006). Since 2006, he has been serving in HLL.

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