Around the world insurance premium has been attracting some tax relief as a measure of incentive to the general public to voluntarily provide for risk cover on their life, health or property. The insurance proceeds, too mostly enjoy exemption from tax as it is a fund meant to mitigate hardship caused due to some unexpected event causing financial loss to individuals or families.
Tax immunity is also offered to savings under life insurance plans subject to certain conditions as mostly they are intended to meet certain unavoidable individual or social obligations. In the United States, however, premium on personal life insurance is not deductible from taxable income as it is treated as a personal expense, but in most of the situations death claim proceeds are tax-free. Maturity proceeds and policy loans are also taxed there.
