14 Apr 2024
Take Advantage Of Single Premium Policy – Read These 7 Tips

Take Advantage Of Single Premium Policy – Read These 7 Tips 

A single-premium policy life insurance plan is a method of paying your premiums that enables you to pay all at once and receive life insurance for the duration of the policy. The Single Premium policy is a one-time life insurance solution as opposed to Regular Premium Payment Plans, where you must pay the life insurance premium on a regular basis, such as monthly, yearly, etc.

You should be aware of the following things regarding a single premium policy :

solitary premium

  1. The absence of regular premium payments is the feature that stands out and is most alluring. 

You only need to make one initial lump-sum premium payment for the single premium policy. After that, there is no reason to continue funding the policy in any way.

  1. Tax advantages for life insurance

You qualify for Section 80C life insurance tax advantages totalling up to Rs. 1.50 lakh under this policy. Additionally, the beneficiary will get the sum assured tax-free at the time of payout. However, you should keep in mind that this single premium life insurance tax benefit can only be used ONCE in the year of investment because it requires a single premium plan.

  1. No Policy Breach

In most cases, a conventional life insurance policy will terminate if the premiums are not paid on time, regardless of how many years you may have already paid the premiums. However, since you are only required to pay one premium payment up front with a single premium life insurance policy, the possibility of a policy lapse is not a concern.

  1. Secured Loan Collateral

May use this lump sum policy amount as collateral for a loan in addition to the tax benefits of life insurance. When you get a single premium life insurance policy, you are building yourself an asset that may be useful when applying for a loan. Additionally, the policy’s cash value grows annually, increasing your asset.

  1. Investment of 100%

Everyone wants to increase their fortune with their current assets. Additionally, this is available through single-premium life insurance. To establish a corpus for your financial future, your full policy money is invested in fund options such as equities, debt, or hybrid. Most insurance companies provide you with the freedom to pick and choose the investments you want to make with your money, giving you flexibility based on your risk tolerance. Additionally, if you are dissatisfied with the performance of the portfolio during the policy’s lifetime, you may also have the choice to transfer between fund selections.]

  1. Health Insurance

The life insurance coverage that this policy provides for you is, of course, its biggest advantage. You are likely to receive much more than the amount you first invested, depending on your age, health, and initial investment! Additionally, your family is financially secure in the event of any unforeseen circumstances, giving you not just peace of mind.

  1. Single Premium Payment Plans often have a cheaper premium than ordinary plans because the entire premium is paid all at once. 

You might not always pay a reduced premium, though. Therefore, you should calculate exactly how much you will save on the premium by choosing a single payment plan.


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