Know All the Term Insurance Premium Payment Options

Term insurance gives you a high coverage against risk of Life. It is economical and hence is gaining popularity. One of the factors before investing in a term insurance plan is to check the payment options. Insurance policies come with different payment options. Consider that before selecting a policy suited for you.

1. Regular Payment Option-

   This involves paying the premium monthly, quarterly, half yearly or yearly and is the most recommended option. If you are a salaried person, paying premium together can burden you. That’s why periodic payments make sense. It also allows you to discontinue the policy once there are no liabilities and you believe that your dependents are financially independent.

Mode of premium payment	Amount of premium	Payout
Regular (Yearly)	12,478	1,00,00,000
Single	2,33,137	1,00,00,000
Limited	13,076 subject to 35 years payment term	1,00,00,000

(Assuming for a 30-year old non-smoker male buying a term plan for 40 years)

2. Limited Payment option-

   It’s a method where you pay the premium for a shorter span of time and enjoy the benefits of an insurance cover for a longer time. Its for two people- Those who don’t like paying for premiums for a longer period of time, and people who have seen a sudden rise in their income, like somebody who has been posted abroad for a few years for work or a businessman whose business is doing well lately. Limited payment option is also a good one for those who would be retiring before the term plan expires. In this case, there is no expense on the insurance post-retirement as the premiums are already paid. At the same time, the cover extends for a longer period even post-retirement. The premium that is paid, however, is higher than the premium paid in regular insurance policies

3. Single Payment options-

   For instance- a 30 year old person pays an annual premium of Rs.10,000 for 30 years for a sum assured of Rs 1 Crore. That comes to effectively Rs 3 lacs for 30 years. However, a single premium on the same policy one-time for the same sum assured costs Rs 2.4 lacs. While this is less by Rs 60,000 inflation changes the value of the money significantly. So considering that the inflation is at 6%, the single premium of Rs.2.4 lacs amounts to Rs.13.75 lacs after inflation in 30 years. It means you are actually paying a lot more for the policy in terms of time value of money. This is something you must consider and make the calculations upfront before you decide which right product is for you.

HDFC Life offers its patrons the best plans in the Industry. Choose a term insurance best suited for you and help secure your family’s financial future.

https://www.hdfclife.com/life-insurance-plans

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