Ramesh, a freelance animator, received a substantial amount from his father. He wants to invest the money but has not finalised the financial products. When his friend Amit advised him to buy a term insurance plan, Ramesh was confused. He thought of term insurance as a long-term commitment and as a freelancer, Ramesh was hesitant to commit to regular payments. Amit told him about single premium term insurance and how Ramesh can secure his family’s future by paying a lump-sum amount.
Before moving on to single premium term insurance, it is important to know what is term insurance? Term insurance is one of the simplest types of insurance products. The insurance company assures a pre-decided amount to be paid to the nominee in the event of the insured’s death on the condition that the policyholder pays the premiums without fail. Term insurance plans do not have any investment component and terminate after the policy term gets over. The payment of premiums is an important aspect of a term plan. Regular term insurance plans have a monthly, quarterly or annual payments plan, but you can also opt for single premium term insurance plans. With single premium term insurance plans, you have the option to pay the premium for the entire policy term at once as a lump-sum amount.
If you are someone like Ramesh with a fluctuating income, a single premium term insurance could be a suitable option for you. Regular term insurance policies have premium payment tenures stretching over several years, which is a long-term commitment. Since you have to pay a lump-sum amount for a single premium term insurance it is slightly more expensive than regular term insurance. The ideal scenario to buy a single premium term insurance is if you have considerable funds which have to be utilised or have received a hefty cash gift or earned windfall gains in business.
A single premium term insurance plan can be a boon for people planning a secure future for their family but do not want to take on long term commitments. One can opt for Canara HSBC Oriental Bank of Commerce Life Insurance iSelect Smart360 Term Plan and choose from multiple coverages and premium payment options. The iSelect Smart360 Term Plan also offers various payout options and additional inbuilt covers.