The financial crisis in India has made life insurance the most preferred tax saving policy for the salaried class, a study revealed.

ICICI Prudential Life Insurance stated: “79 per cent people prefer life insurance vis-a-vis other tax saving instruments like post office savings, equity Linked Saving Schemes and fixed deposits.”

Around 89% of the participants out of 900 said the investment made in the last two years varied from traditional products, unit linked insurance plan and pension plans.

The survey looked at three areas, Delhi, Mumbia and Chennai and took into account a household monthly income of Rs 40,000 per month; to which some households purchased two policies.

It is thought that life insurance was most popular because it has security aspect and comfort for investment in terms of easy payments and good service.

However, the benefits of life insurance is heavily unknown as the insurance firm stated: “Awareness on the tax exemption levels under various sections is low, it said, adding only 17% of respondents in the three metros are aware of the maximum amount that can be invested under life insurance for availing tax benefit. About 16% of the respondents are aware of 80c, under which a policy holder can save tax.”