Thu. Jul 25th, 2024

Choosing a life insurance is no child’s pay. You have to consider a lot of factors and choose what works the best for you and your family.

And for some people, maintaining their term policy, even if it’s just one payment every year, could be hard. If you are someone like this and you just don’t want to be bothered with insurance payments till the end of the tenure, a single premium term insurance could be just the right option for you.

What is term insurance?

Term insurance is a life insurance policy for a certain period of time. In this, the beneficiary will get the insured amount if the insured passes away during the insurance period.

A term insurance plan is meant to safeguard your family, even in your absence, if something unfortunate is to happen to you.

What is a single premium term insurance?

Single premium term insurance works just like a traditional term insurance. The only difference is in how the premium is paid.

In a traditional term insurance plan, the premiums are paid in regular intervals – it could be monthly, quarterly, or yearly. But in a single premium term insurance, the premiums are paid in one go.

Who should consider a single premium term insurance?

  • If you are forgetful – It might sound trivial, but it’s best if you go for a single premium term insurance if you think you are forgetful because life insurance is not something you can leave to chance. Life could get extremely busy and being forgetful is natural. But if you forget your premium, your term insurance could become void and if something is to happen to you, your family could be left stranded. In this scenario, a term life insurance with a single payment option is your best friend. Here, once insured, you will have to bother about it only when the term ends.
  • If you have a lumpsum to spent – Affordability is a crucial factor here. Not everybody will be able to spend a big amount on premium in one go. But if you can, it could prove to be the best choice as you are sure that you will be insured till the end of the insurance period, even if life gets financially tough for you and you end up unable to pay a monthly or yearly payment.
  • If you looking to save tax –Paying your insurance premium in one go could be a good tax-saving option, depending on your tax regime. If you are on the old tax regime, insurance premium amount of up to Rs. 1.5 lakh is tax-deductible. In the new regime though, premiums have no tax exemption, but the amount claimed in case of a demise remains tax-free.
  • If there is a life changing event happening soon – It could be a switch in your career to something you always wanted to explore or starting of your own business – a big change is sometimes inevitable. Paying your team insurance premium in a lump sum before such a change ensures that you don’t have to worry about insurance payments if you face a cash crunch in future. During the times of financial difficulties, we might often neglect the importance of insurance and delay the premium payments. This could put your family at risk. Here, a single premium term insurance could make sure you are well-protected.
  • It can be a collateral against loan

You can use your life insurance policy as a collateral for a loan if you ever face a cash crunch. While all term insurances can be used as collateral, a fully paid one will have more value.

How to buy single premium term insurance online?

Buying a single premium term insurance policy is similar to buying a traditional term insurance. Here are the common steps –

  • Go to the insurance provider’s website.
  • Use tools like term insurance premium calculators and compare different term insurance plans.
  • Register and select asingle premium term insurance plan.
  • Provide proper KYC, medical and beneficiary details.
  • Pay the premium in one go.

Doesn’t matter how you plan to pay for the policy, life insurance is a must and it is a matter of security of your family. If you don’t have term insurance yet, the best time to get one is now!

Go to an insurance provider, compare term insurance plans, and choose one today!

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