Life insurance is a contract whereby a person transfers to an insurance company the life risk of a person in whose life they have an insurable interest. Insurable interest refers to the earnings of a person's survival or the probability of incurring a financial loss in the event of the person's death. For example, a dependent parent has an insurable interest in the life of a son or a winning daughter, as it depends on his earnings and would suffer a financial loss in the event of the death of the son or daughter who wins.
Similarly, a housewife has an insurable interest in her husband's life, an employee in the life of her employer, an employer in the lives of her key employees, and so on. It is also considered that a person has an infinite insurable interest. in his own life.
However, even if a minor child has an insurable interest in the life of his or her winning parents, children can not purchase insurance for their parents because, as a minor, a child can not enter into a contract. It is interesting to note that even the major sons and daughters who earn or are able to earn can not take out life insurance either because of a lack of insurable interest because the loss of the parent can cause a loss. emotional, but not a financial loss.
According to the rules, a person can pay an insurance premium on the life of the person in which he has insurable interest and claim tax benefits on the payment of premiums, even if he can not offer insurance. Indeed, an applicant can only be a different person, only when the insured life is not able to conclude a contract, in the same way as underage children.
Thus, a person of full age and able to take out a policy must offer insurance for his or her own life, but another person with an insurable interest, such as a parent or spouse, can pay the premium and claim tax benefits.
Thus, an insured insured can pay an insurance premium in his own life and claim tax benefits. For example, a person gaining insurance that insures for herself.
On the other hand, a proponent may also claim tax benefits by paying a premium after proposing the insurance of a person who is not able to enter into a contract, but in the life of which he has an insurable interest. For example, a parent for the insurance of his minor children.
In addition, the premium payer (who is neither the nominee nor the life insurance) for the insurance of a person in whom he / she has insurable interest may also claim tax benefits. For example, a parent for the insurance of his son or daughter.
Since Medicare plans also generate returns, such insurance is exempt in the case of a husband and a wife. For example, even if a winning spouse does not have an insurable interest in the life of a non-salaried spouse, he can still pay premiums and claim tax benefits.
Thus, any of the life, proposed and premium payers can claim tax benefits on the actual payment of premiums, if the condition relating to insurable interest is met, with the exception of the spouse.