Single premium insurance- when should you opt for

December 12, 2018

A single premium insurance plan offers certain benefits over the regular premium plan. For one, it saves the policy subscriber from the hassles and inconvenience of having to track the schedule for paying regular premiums. Besides being more convenient, it is more economical when viewed from the long term perspective of premiums involved in payments over years (payable premiums in regular premium policies). However, there are certain things that you must consider before investing in single premium insurance plans. The exemption on taxes for instance is variable and if 10% of the main corpus (sum assured) is less than the paid annual premium, then no exemption can be claimed. Besides a regular premium plan inculcates financial discipline and keeps you in know of the exact fund position. There is also the factor of rupee cost averaging which actually works in the favor of single premium policies. This factor cushions your corpus from market related risks. This is not possible with single premium insurance plans.

Before taking any decision regarding purchasing a single premium insurance plan, you must list your requirements and prepare a suitable plan of action accordingly. The saving and investment portfolio that you maintain must be diverse and this should ideally mean that if you have had a profit or an unexpected gain in the form of any monetary benefit or reward etc., then you must consider having a single premium insurance plan for added benefits. The plan must suit your needs and must have clearly listed and mentioned terms and conditions. You must keep in mind the various factors that count. For instance, your plan must be cost effective. For instance, in the event of the subscriber's death, a regular premium plan entitles the nominee(s) for the death benefit. However, in case of single premium insurance plan, the lump sum amount paid by the subscriber is actually of no use to the nominee(s) in the event of demise of the subscriber before the policy term.

HDFC Life offers several term plans that have been formulated keeping the financial interests of your loved ones in prime focus. These plans offer complete and extensive financial coverage and allow you to lead a stress free life with no financial woes of any sort. For details, click on the mentioned link: https://www.hdfclife.com/term-insurance-plans.