If a person discontinues paying premium on his life insurance policy, does he get tax benefits?
If a person stops paying premium amounts on his/her life insurance policy, it amounts to discontinuation of the policy. Hence, he is not entitled to claim any tax benefits. If a tax-payer discontinues the life insurance policy before premiums have been paid for a period of 2 years from the commencement of the policy, no tax deduction is allowed in respect of any premium paid on that policy in the year in which the policy is terminated. Further, the amount of tax deduction, allowed for the premium paid in the preceding year, is treated as income and taxable for the year in which the policy is terminated.
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