Important Point in this regards are given below
Deduction u/s 80c of income tax is available to Individual and Huf Assessee.
Maximum total eligible amount under this head (LIFE insurance Premium) is Rs. 1.,00,000 /-
The limit of one lac as above is total limit u/s 80C for all type of savings ,plus section 80CCC(pension policy) plus u/s 80CCD(Contributory Pension Plan).Means the aggregate amount of deduction under above referred sections can not exceed Rs. 1,00,000.
If policy taken after 1.4.2003 then Premium paid up to 20% of sum Assured is Eligible for deduction.
Payment should not be necessarily from income chargeable to tax.
Minimum Period of holding of policy is Two years ,if policy terminated before two year then all benefit claim taken in earlier year will also be taxable in the year of termination.
Premium paid is eligible on "payment basis" means deduction is available in the year of payment no matter to which year premium relates to.
In my opinion late fees paid in addition to premium payable is also eligible for deduction as late payment fees is paid "to keep in force an Insurance".but it is advised not to claim as there are different opinion on this issue.