Bonus will Not Count as Cover

Pranab Mukherjee, Finance Minister, has also altered the definition of insurance cover. While computing the sum assured for claiming deductions, premiums will be returned to the insurer and bonus will not be taken into account.

The Budget states, “This amendment has been proposed to ensure that the life insurance products are not designed to circumvent the prescribed limits by varying the capital sum assured from year to year”. Which simply means, “Focus on life cover, and not on the investment component.”