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LIFE ASSURED, PROPOSER OR PREMIUM PAYER – WHO MAY CLAIM TAX BENEFITS ON LIFE INSURANCE? Life insurance is a contract through which a person transfers to an insurance company the life risk of a person in whose life he or she has an insurable interest. Insurable interest means gains from survival of a person or probability of suffering financial loss on the demise of the person. For example, a dependent parent has insurable interest in the life of an earning son or daughter, because the parent depends on his or her earnings and would suffer financial loss on the demise of the earning son or daughter. Similarly, a housewife has an insurable interest in the life of her husband, an employee in the life of his/her employer, an employer in the life of his/her key employees etc. It is also considered that a person has infinite insurable interest in his/her own life. However, although a minor child has insurable interest in the life of his/her earning parents, but children can’t take insurance for parents because, as a minor, a child can’t enter into a contract. Interestingly, even major sons and daughters, who are earning or are capable to earn, also can’t take insurance on parent’s life due to lack of insurable interest, as loss of parent may cause emotional loss, but not financial loss. Read the full article at www.starhealthdevarajan.com/news/712 For Insurance Related Services, U can always call us at 98401 77017 Devarajan