Investment for wife - PPF & Term Insurance Policy

Q & A Forum › Category: Provident Fund (EPF & PPF) › Investment for wife – PPF & Term Insurance Policy

jal4all asked 10 years ago

Hi Sir, This is Javed, i am a regular reader & follower of your blog. I have some queries related to investment on behalf of my wife. My wife is a home maker, i have opened a PPF account on her name for investment. My first question is, can i claim tax benefit for this PPF? (I am already having my PPF account) I want to take an insurance policy for my wife, i dont want to invest in normal traditional policies instead i want to buy a TERM PLAN. So is it possible to take Term Plan on my wife's name, as she is a house wife? If yes then pls suggest some term plans for the same. Thanks.... Awaiting for your reply

7 Answers

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Sreekanth Staff answered 10 years ago

Hi, Yes, you can definitely have a PPF account in your Spouse's name and you can contribute to both accounts (self & spouse's). However, the maximum limit that you can claim as tax benefits is Rs 1.5 Lakh.

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jal4all answered 10 years ago

Thank you for the info about PPF. Can u pls suggest anything about TERM PLAN for my wife.

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Sreekanth Staff answered 10 years ago

Hi, If she is not an earning member of your family, Life insurance in your spouse's name is not necessary. May I know if you have adequate life cover? How about health cover for self & family?

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jal4all answered 10 years ago

Hi Sir, My investment portfolio is: Age: 32, Salary: 50K pm

LIC Jeevan Anand - SA 2Lac
Bharti AXA Merit EDGE(ULIP) - SA 3Lac
PPF - 3k pm
SBI Smart Shield Term Plan - 50Lac with Riders
Mutual fund Axis LTE Fund DG SIP - 2k
Mutual fund HDFC Balanced Fund DG SIP - 2k
Health Policy from company - SA 4Lac

Pls check and inform me if anything can be done to improve my investment and as i said earlier i want to invest on my spouse's behalf.. Thanks

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Sreekanth Staff answered 10 years ago

Hi, 1 - Kindly share plan commencement dates & policy tenure details of LIC & Bharti plans. Read : http://www.relakhs.com/traditional-life-insurance-plan/ 2 - If you do not have Personal Accident insurance cover, kindly buy one. http://www.relakhs.com/best-personal-accident-insurance-policies-in-india-details-comparison/ 3 - Also, buy a family floater health plan and do not depend entirely on Employer's group cover alone. Read: http://www.relakhs.com/best-family-floater-health-insurance-plans-details-checklist-comparison/ http://www.relakhs.com/factors-tips-best-health-insurance-plan-india/ http://www.relakhs.com/best-health-insurance-comparison-websites-portals/ 4 - Axis LTE & HDFC balanced funds are good ones. 5 - Kindly note that if you gift amount to your Wife, and if she invests then any taxable income earned on these investments will be clubbed to your income. However, if she invests in say equity funds (for ex) and redeems the units after say 1 year then Long term capital gains (if any) will not be clubbed and it is tax exempt as it is not a taxable income. Read: http://www.relakhs.com/gift-income-tax-rules-detailed-guide/

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jal4all answered 10 years ago

Hi Sir, Thank you for your suggestions. Pls note that LIC Jeevan Anand is of 16yrs plan started from 2007 and Bharti Axa plan is of 10yrs started from 2010.

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Sreekanth Staff answered 10 years ago

Hi, 1 - You may consider making LIC Jeevan Anand plan a PAID-UP policy and re-invest the saved premium either to enhance your Term insurance sum assured (if you require more life cover) or invest this in Equity funds/better investment alternatives for your long-term goals. Read: http://www.relakhs.com/how-to-get-rid-off-bad-life-insurance/ http://www.relakhs.com/list-of-best-investment-options-schemes-in-india/ 2 - The returns from your ULIP are dependent on the type of Fund you have chosen. As only 4 policy years are remaining and if you are satisfied with the returns, suggest you to hold it till the maturity period.