Do you want to buy insurance but don’t want to pay premiums at every interval?
Then single premium insurance coverage might turn out to be ideal for you. In contrast to a standard or regular premium insurance, which requires the life insured to pay the premiums on a regular basis, single premium insurance is a one-time payment alternative.
This insurance plan is like – pay, forget, and you get a plan with a guaranteed death benefit in hand. Therefore, you need not worry about making more payments or having your coverage lapse if you forget to pay with this plan.
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ToggleBenefits of Single-Premium Insurance Plan
- As a single premium is a one-time investment, there are higher chances that the premium payment shall exceed 10% as it differs from the regular and standard life insurances. The life insured is liable to pay the premiums in regular insurance premiums in periodic intervals.
- It funds the life cover as the entire premium is paid.
- One-time plan purchasers can save tax by paying a single premium but only once per fiscal year. If you purchase more than one single-premium plan, you can only claim tax exemption on one insurance for that fiscal year. It derives that the user can purchase a new single premium plan each year and receive tax benefits.
- You won’t have to worry about the payment lapse due to the non-payment of premiums or bother about keeping track of the plan.
- Tax Benefits: Buying insurance is synonymous to saving taxes. Under the Section 10 D of the Income Tax Act (1961), if the premium on the insurance exceeds 10% of the sum insured for insurance policies that are issued post-April 1, 2012, and 20% of the sum assured for the insurance plans that came into being before April 1, 2012, the sum received on maturity is liable to tax.
If you observe, a user can avail of this type of insurance plan at a lower premium for a valuable sum assured compared to other life insurances with monthly or quarterly premium payments.
For example, if the user goes for a 2 crore term policy for 10 years, it would have Rs. 2000 as monthly premium. By the end of 10 years, they will end up paying 2.4 lakhs. On the other hand, the same plan will cost you around 2 lac on average if you take a single premium payment, thus saving around 20% of your money.
Who Should Consider Purchasing a Single Premium Insurance Plan?
A camera fits the best in a photographer’s hand, a term insurance is one of the best sorts for a youngster in their twenties. Similarly, every life insurance is tailored according to a specific type of audience based on their needs and requirements. A single premiums insurance is an ideal deal for the following types of audiences,
- If you are into business and have experienced an unexpected boom, this is the right junction to invest and reap more than what you have given to the insurance company. For instance, an e-commerce trader experienced a spike in your annual earnings (increase in revenue by 5 lakhs); you can put some chunk of it in a single insurance premium to make the most out of it.
- Sudden cash flow due to inheritance, sale of any property, and other cash gains.
- Those who belong to a non-steady income group, you can consider single-premium insurance plans. You must pay a one-time premium; it can be an ideal plan for freelancers, contractual employees, and other service providers who don’t necessarily earn every month.
Best Single premium insurance plans offered in India
Insurance is a huge world and it is filled with multiple plans from different genres. But, would you like to put your money in any plan or a legitimate one from a reliable insurance provider?
Therefore, we bring you some of the best and finest single premium life insurance plans that one can consider buying. They are:
Aditya Birla Sun Life Insurance Wealth Max Plan
This effective plan by the ABSLI is a single premium unit-linked insurance plan that offers financial security for you and your loved ones. In a nutshell, it gives the life insured the opportunity to earn higher profits by investing. They come with two investment options, and they are,
Systematic Transfer Investment: This strategy protects your wealth from market volatility and balances out the risks connected with the stock market.
Self-Managed Investment: It gives you the liberty to access 16 segregated funds as well as a comprehensive choice over how you want the premiums to be invested.
Other perks included in this plan are as follows:
Guaranteed Additions: The life insured is assured with additional perks for continuing the policy.
Death Benefit: When the life insured meets with unexpected death when the term plan is active, the beneficiary will avail the death benefit the greater of:
Basic Fund Value as of the date of death notification;
Or, Basic Sum Assured
Apart from that, the insurer (insurance company) shall also pay the higher of,
Top up sum guaranteed
Top up fund value on the date of death
Surrender Benefit: This benefit allows the life insured to surrender the plan at any time if any emergency arises.
Maturity Benefit: Towards the end of the term, the policyholder shall be given the Basic Fund Value along with the Top-Up Fund Value.
Aditya Birla Sun Life Insurance Wealth Assure Plus
The Wealth Assure Plus plan by the ABSLI is a beneficial tool that can be tailored to the insured’s specific requirements. This plan comes with four investment options, and they are,
- Smart Investment Option
- Systematic Transfer Investment Option
- Return Optimiser Investment Option
- Self-Managed Investment Option
Features of this plan are as follows:
Guaranteed Additions: Following maturity, additional units equal to a percentage of the base premium are added to the plan. There are two bands, and the guaranteed additions for the premium Band 1 range from 10% to 50%, depending on the insurance parameters.
Premium Band-2 when the plan matures, the guaranteed additions are increased by 10% over the basic premium.
Death Benefit: When the policyholder meets with untimely death, the beneficiary shall receive the following benefits, and they are:
- Guaranteed top-up amount
- Assured Basic Sum
- The value of the basic fund on the date of death
- Top up fund value on the death declaration
Premium Waiver for Critical Illness: As per this benefit, when the policyholder suffers from any critical illnesses (CI) or total and permanent disability (when the term plan is active), the insurer will wave off all future premiums.
Note: This advantage can be availed only when the policyholder has selected the Assured Option.
Maturity Advantage: If the policyholder survives until the end of the plan, the fund value will be paid in lump sum or as a structured payment using the Settlement Option (the condition is that all outstanding premiums are paid). Therefore, along with the fund value, the premium allocation fee and mortality price will be repaid and added to the fund value as additional units.
Riders: You can consider them as a set of perks that comes at a pocket-friendly rate.
- ABSLI Accidental Death Benefit Rider Plus
- ABSLI Waiver of Premium Rider
To know more about this plan, Click Here – ABSLI Wealth Assure Plus.
Conclusion
In a nutshell, a single premium life insurance plan saves your time, saves from periodical premium payments, and is one of the best for a non-regular income group. If you look closer, it might seem as a smart choice where you pay less and reap more.
Therefore, if you want the best out of the single premium insurance plan, opt for the best insurance provider. It is better to live through reliability rather than falling into an unknown pit.
