There are different types of term plans, which are designed specifically to help the policyholders make the most of it. One such option is the limited pay option. Read on to know more about it. 

Term insurance plans are known for offering high coverage at an affordable premium compared to other types of life insurance policies. Having a term plan in your financial portfolio is vital as it helps secure your loved ones’ financial future while you are gone. The insurance pays the death benefit to the nominee in case of your premature death during the policy period and enables the family to meet their daily expenses and save themselves from future financial hassles. 

It is obvious that the higher the sum assured, the higher will the death benefit received and therefore the family will have better financial security. 

What is limited premium payment term insurance?

As the insurance buyers demand more customised insurance products and services to solve their individual purposes, the insurance service providers are launching new products. If you are looking to buy a new term plan, you have the flexibility to choose the premium, term, coverage amount, and features as per their specific requirements. One such plan is the limited premium payment plan, which is specifically structured to their preference of the policyholder. 

 Limited pay term insurance plan allows you to pay the premium for a limited period, while ensuring that you get the policy benefits for the full duration. In short, the policy gives you the advantage of limited payment and an extended coverage. For example, let us assume you have purchased a limited pay term plan for 25 years, you may have to pay the premium only for 10 years but you get the coverage and other policy benefits for 25 years. 

Benefits of buying a limited pay term insurance plan

One of the most significant benefits of a limited pay term plan is that it frees you from the obligation of premium payments for a long period. You must pay the premium for a limited, pre-decided tenure while enjoying the coverage for a longer period. Thus, if you plan right, limited premium policy can help you pay the premium within you active working life and you can enjoy the benefits during retirement without worrying about premium payments. 

Since the premium are payable only for a limited period, you need not make any efforts to pay the premium on time for a longer period. And as the premiums are paid off within a short period, the possibility of policy lapse reduces. 

When you pay the premium for any type of life insurance policy, you are eligible to get tax benefit up to Rs. 1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act. 

Owing to the current work culture and the uncertainty brought by the COVID-19 pandemic, many individuals’ career span may be short or they can expect to earn only for a limited period. For such individuals, paying the insurance premium may not be feasible and therefore limited premium payment term insurance policy would be a perfect solution. It will free them from long-term premium payment commitments and ensure that they get the life cover they need. 

Final Word

Thus, the limited pay term plan is a boon for all insurance buyers. If you don’t have a life cover yet, invest in a limited pay term plan now and make the most of it.