Saving money on insurance premiums through Credit Card payments is possible. Do you know that insurance premium payment through Credit Card offers tax relief? Single Premium Life Insurance (SPLI) policies provide protection and savings as regular premium ones. It qualifies for tax benefits under Section 80C (at the time of investment) and for making the maturity proceeds tax-free under Section 10 (10D) of the Income Tax Act, 1961. However, one needs to be careful while purchasing such policies. Or else, both these benefits might not be availed.
Premium paid towards life insurance policies allows for deduction under Section 80C, up to a maximum of Rs 1.5 lakh annually. Paying your insurance premiums with a Credit Card will help you avoid a Credit Card late payment fee, especially if you use auto-debit.
Insurance premiums billed to your Credit Cards are not deducted immediately because there is no instant reconciliation between the bank and the insurance company. This makes time and money available to you at the same time. You have time to get your periodic earnings, and you have money that can be applied to alternative uses before it gets deducted.
Here are some ways to save money on your insurance premiums via Credit Cards.
How to Save Money on Insurance Premiums with a Credit Card?
Many benefits come along with using your Credit Card for insurance payments, such as obtaining insurance coverage and enjoying the benefits of Credit Card usage. Insurance premium payments with Credit Cards offer convenience, auto-debit features, and protection against penalties.
Here are other ways to save money by paying insurance premiums with your Credit Card:
Earn Reward Points
Most Credit Card companies reward you with points that can accumulate and be transferred into your cash account. You equally enjoy reward points when you use them for your insurance premium. The points can be redeemed for cash and applied towards future premiums.
The Income Tax Act of 1961, sections 80C and 80D, are two types of deduction you could get. Firstly, you can claim a deduction of Rs 1.5 lakh annually for the premium paid for yourself and your family.
Secondly, you can get up to Rs 25,000 for your family and up to Rs 50,000 if your parents are aged 60 or above. This is possible when you pay your premiums online using your Credit Card.
Avoid Late Payment Charges
You can avoid Credit Card late payment fees if you set up automatic payments. You can either set it on auto-debit or for Equated Monthly Instalments (EMIs). By doing so, you won’t have to worry about the premium’s deadlines or what amount will be deducted if you forget to initiate payment.
How to Pay Your Insurance Premiums with Credit Cards?
You can make your insurance premium payment in different ways. It is a simple process. However, you can set it up in any of the following ways:
Pay When Due
Paying your insurance premium with your Credit Card is straightforward. Just provide your card details when payment is due. The insurance company will process the payment by charging your Credit Card for the premium amount due.
Set it on Auto-Debit
This payment method is the most convenient way of paying your insurance premiums. It takes away the burden of reminding yourself about when to pay. If you experience any issues while setting up the card, contact your Credit Card issuer for help, and it will be resolved.
Set it for EMIs
You can set up Credit Card payments for EMI depending on your insurance coverage. It is an easy, convenient, and flexible method of payment. If you find your insurance premium hard to pay at once, you can set up an EMI for the deductions.
Before buying an insurance coverage, ensure you can afford the premiums. This will facilitate payment with Credit Cards. Hence, get the coverage you can pay for with ease, and you’ll be able to save money with your Credit Cards.
Paying your insurance premiums and using your Credit Card is a double advantage. You save some money by protecting yourself against insurable losses and avoiding Credit Card late payment fees in the same process.