Difference Between Regular and Limited Premium Term Plans

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Difference Between Regular and Limited Premium Term Plans

Life insurance plays a crucial role, as it mitigates the financial problems that can arise in the policyholder’s family due to his or her untimely death. Investing in life insurance as early as possible should always be the top priority of people.

If you are planning to buy a life insurance policy, then it is advisable to opt for a term plan. It is one of the most sought-after policies available in the market today. Many people do not have any idea about what is term insurance plan and how it can safeguard your family’s monetary well-being. We are here to guide you with this.

A term insurance policy is purely a life insurance plan that pays the death benefits to the policy’s nominee if the policyholder dies within the plan’s tenure. As there are numerous insurance companies providing term plans, it is advisable to use a term insurance premium calculator to compare the various features of different policies. It can help you to select an ideal plan that can meet your budget and requirements.

While you buy a term plan online, it is necessary to understand its various offerings. Term insurance companies offer multiple premium payment options. You can explore these while investing in a policy. However, first, let us understand what the premium payment term is.
In life insurance, the premium payment term refers to the total number of years you will pay the premiums. This duration can be the same as the policy tenure or less than this period. So, if your policy duration is 25 years, your premium payment term can be 25 years or a lesser tenure. Here, we will discuss and compare two premium payment terms, regular premium and limited premium.

Regular premium

The regular premium payment term provides you with an opportunity to get sufficient coverage at a cost-effective rate. Here, the premium is quite cheaper compared to the limited premium term, as you are paying it throughout the plan’s duration. For instance, if you have invested in a term plan for 20 years, you will have to pay the premium till this period. A regular premium option gives you the flexibility to discontinue your policy when you feel that your dependents are financially independent.

Limited premium

In a limited premium payment term, the tenure of the premium payment is less than the policy’s period. Here, the insurer will provide you with the option to pay the premium in five, 10, or 15 years. However, the premium will be more if the payment term is shorter. For instance, if your term policy has a tenure of 20 years, you can pay the premiums for 10 years and continue to remain insured for 20 years.

Which payment option should you choose?

If you are looking for a high sum assured at an economical premium, you can opt for a regular premium payment term. This option can prove handy, as you will leave behind a huge sum assured for your family that too at a lower premium. On the other hand, if you have a steady flow of income from your business or if your tenure outlives your retirement age, you can select the limited premium payment plan, wherein you can pay for a shorter period and stay insured for a longer duration.

When you buy a term plan online the premium is quite affordable compared to purchasing it offline through an insurance agent. It is recommended to use the term insurance premium calculator and compare the premiums of different policies. With this, you can find a suitable policy as per your needs. Understand which premium payment term is more appropriate as per your employment and monetary situation, and accordingly make a wise decision.


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