Single premium term insurance policy is designed for those
who want to buy a policy at one go. As compared to traditional insurance
products, policyholders have to pay premium at periodic intervals for these
policies.
It is a onetime payment solution for those who don’t want to
go through the trouble of periodic payments. When the premium payment has been
done, buyer becomes the policy owner with certain death benefits.
For single premium term insurance policy, policyholders
don’t have to worry about paying any further premium payments or the lapse of
your insurance if insured forget to make any payments.
All leading insurance companies in India offer this
insurance for the benefit of their clients and customers can access some policy
aggregator portals online to know which one is suitable for your needs. If you
have a lump sum fund with you, then it is advisable to opt for a single premium
term
insurance plans.
Under this plan, policyholders get financial security
against taxes. When person invests in this insurance product, he or she is
given exemption of up to Rs 1.5 lakh. In case something happens to
policyholder, his or her beneficiary would get the insurance money which is
absolutely tax free.
But, insured is eligible to avail the tax exemption benefit
only once for this policy because policyholder is investing in this insurance
for one time only. As you paid up in full upfront for this policy, so you don’t
have to worry about the plan getting lapsed if you forget to pay the premium
amount.
Your policy is completely valid till the entire policy term
and reduces the sum assured when the policy period comes to an end. It
generates cash value. Person is building a financial asset for himself or
herself when he or she makes the premium payment for single premium term
insurance. It comes in handy if you want to apply for loan and can be used as
collateral against loan.
[Source: http://blog.policyboss.com/term-insurance/know-single-premium-term-insurance/]
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