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Single Premium Savings Plan: Pay once, get uninterrupted benefits!

Imagine this! You’ve got a huge lumpsum amount lying in your bank – the result of years of saving.

Author:IndiaFirst Life | Date:08 Nov 2023 | Time:16:24:00

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Imagine this! You’ve got a huge lumpsum amount lying in your bank – the result of years of saving. You have three choices: 

  1. 1) Leave it in the account and let it grow at a low rate of interest. 

  2. 2) Spend it to fulfil a life goal or aspiration. 

  3. 3) Invest the lump sum amount to get the benefit of wealth creation and life insurance

If you’ve selected option 3, congratulations! You’re about to discover the life-changing benefits of single premium policy! 

What is single premium policy? 

A single premium policy is a life insurance savings plan, in which you pay the entire premium amount as a one-time lump sum when you purchase the plan. The plan, in exchange, gives you life cover, death benefit and other maturity benefits that continue for the plan’s full term, without any additional payment.

Unlike other term insurance plans that require you to pay the premium monthly, quarterly or annually, single premium life insurance is a convenient option that removes the hassle of remembering to pay your premiums.  

How does single premium life insurance policy work?

With a single premium policy, you make only one lump sum payment upfront at the time of purchase and enjoy the benefits throughout the policy term. This is one of the best investment options to build a corpus for long-term financial security. 

Features of single premium policy

A single premium policy offers many significant benefits over a policy that requires periodic premium payment.  

  1. 1) Removes the fear of policy discontinuation: Missing a premium payment can lead to policy discontinuation, which means losing all the benefits. If you find it difficult to remember due dates, a single premium policy only requires a one-time payment and hence, will not penalise you for forgetting premium payment.  

  2. 2) Financial convenience: No need to struggle to gather the funds to pay periodic instalments. You pay a lump sum at the beginning, and then enjoy worry-free experience with no more payments to think about.  

  3. 3) Discounted premium: Most insurers offer a discounted premium when it’s a lump sum payment, which makes a single premium savings plan give you more value. Even though regular premium instalment may seem like a more feasible outflow, it amounts to more over the tenure than a single premium savings plan. 

  4. 4) Grows your savings: Saved a huge amount? Received cash presents, a bonus or inheritance? Start creating a corpus with a single premium savings plan. 

  5. 5) Irregular income? No problem: Businesspeople, freelancers and consultants who do not earn a monthly income are spared the stress of paying the premium regularly. 

  6. 6) Tax benefits: Tax benefits may be available on premiums paid and benefits receivable as per prevailing Income Tax Laws. These are subject to change from time to time as per the Government Tax laws. Please consult your tax consultant before buying this policy.  

All these benefits make it advisable to buy IndiaFirst Life Guaranteed Single Premium Plan.  

Single premium life insurance plans 

There are many single premium life insurance plans available and it’s best to compare them before you choose one. For example, if you invest in IndiaFirst Life Guaranteed Single Premium Plan for 30 years, the plan guarantees you 7X returns on investment when the policy matures. In the unfortunate event of the policyholder’s unexpected death during the term, the single premium savings plan will support your family by paying the death benefit as well as pay out the maturity benefit when the policy terminates.  

In simple terms, if you're someone who prefers making a single payment rather than paying premiums regularly, a single premium life insurance policy could be a good choice. The tax benefits might be pretty much like those of a regular policy following the same terms and conditions. But keep in mind that you will require a bigger outflow even though it is a one-time payment. 

So, evaluate your tax priorities, budget, and other important factors to see if a single premium policy suits your needs. Getting advice from a tax expert or financial consultant will help you make the right decision. 

Also read: Top 5 Reasons to Buy a Life Insurance Policy 

FAQS 

  1. 1) Are all Life Insurance policies single premium? 

No, all Life Insurance policies do not require a single premium. Depending on your financial feasibility, you can pay your premium in monthly, quarterly, or annual instalments. 

  1. 2) Are single premium policies exempted under 80c? 

Tax benefits may be available on premiums paid and benefits receivable as per prevailing Income Tax Laws. These are subject to change from time to time as per the Government Tax laws. Please consult your tax consultant before buying this policy.  

  1. 3) How much will I get in single premium policy? 

The maturity benefit depends on many variables such as the investment amount and tenure.  

  1. 4) Is it good to buy single premium policy? 

Yes, it is good to buy single premium policy for the many benefits it offers.  

BY

IndiaFirst Life

Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 663 crore, is one of the country's youngest life insurance companies. Our key differentiators are our simple, easy-to-understand products that are fairly-priced and efficiently serviced.We offer a diversified suite of over 46 need-based products & Riders (as of 31st March 2022) catering to varied customer segments, leveraging multiple distribution capabilities and augmenting various investment options. In all, propositions under the categories of Protection, Assured Savings, Wealth, Pension, Health and Group Funds for Employee Liabilities form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and competitively priced with risk management being our core strength.

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