- When to Opt for Single Pay
- Eligibility Criteria
- Pros & Cons Of Single Premium Term Plan
What is a Single Premium Term Plan?
A single premium term plan is a type of life insurance policy that requires the policyholder to pay the entire premium in a single payment, rather than making regular payments over time. This kind of policy offers protection for a predetermined term, usually between 10 to 30 years, and pays a death benefit to the selected beneficiary if the policyholder passes away while the policy is in effect.
The premium for a single premium term plan is generally lower compared to a regular term plan with the same coverage amount and term because the insurer does not have to worry about collecting premium payments over time. However, the policyholder is required to pay the entire premium upfront, which can be a significant financial burden for some individuals.
Best Single Premium Term Insurance in 2024
We have curated a list of the best single premium term insurance plans in 2024 that you can consider for buying.
| Name of the plan | Entry Age | Tenure | Single Premium | Unique Features |
|---|---|---|---|---|
| Max Life Smart Total Elite Protection | Minimum Age- 18 years Maximum Age- 65 years | 5 to 67 years | Rs 2,04,822 | Special exit value, Inbuilt terminal illness cover, Insta Payment on claim intimation |
| ICICI Prudential iProtect Smart | Minimum Age- 18 years Maximum Age- 65 years | 5 to 40 years | Rs 2,00,589 | Long-term cover, Life-stage benefit, 4 payout options |
| HDFC Life Click 2 Protect Super | Minimum Age- 18 years Maximum Age- 65 years | 5 to 85 years | Rs 1,96,961 | Flexibility to choose multiple coverage options, Option to increase cover at key stages, Option to extend policy tenure |
| ABSLI Digishield | Minimum Age- 18 years Maximum Age- 65 years | 5 to 40 years | Rs 1,91,788 | Affordable premiums, Flexible policy tenure, 2 plan options |
| SBI Life eShield Next | Minimum Age- 18 years Maximum Age- 65 years | 5 to 100 years | Rs 2,01,185 | Choice of 3 plan options, Terminal illness benefits, Multiple premium payment options |
* In the above table the premiums shown belong to a 30-year-old non-smoking male for a policy term of 30 years and the premium payment term is single pay with a chosen sum assured of Rs 1 Crore.
When to Opt for Single Premium Term Insurance?
Single premium term plan or one-time premium term plan is a great option in term insurance, but it is not for everyone. There are certain things you must consider before opting for a single premium term insurance policy.
You have a lump sum of money
If you have a large amount of money available, paying the premium upfront in a single lump sum can be a convenient option.You want to save on premium payments
A single premium term plan typically has a lower overall cost compared to a regular term plan with the same coverage amount and term.You wish to avoid the hassle of making regular payments
With a single premium term plan, you only have to make one payment and do not have to worry about making regular payments over time.You have a short-term coverage need
If you only need coverage for a short period, a single premium term plan can be an economical option.
Eligibility and Documents Required for a Single Premium Term Plan
Eligibility criteria and the required documents needed for a single premium term insurance plan vary between insurance companies. The following are the common eligibility criteria and documents that are asked by insurance companies:
Eligibility
Age
Most insurance companies require the policyholder to be between 18 to 65 years old to apply for a single premium term plan.Health
The policyholder must be in good health and free from any pre-existing medical conditions.
Documents Required:
Identity Proof
A government-issued photo ID such as a passport, driver’s license, or PAN card.Address Proof
A utility bill, bank statement, or rental agreement that shows your current address.Income Proof
Proof of income such as salary slips, tax returns, or bank statements.Medical Reports
Depending on your age and health, you may be required to undergo a medical examination and provide the results.
Although these are the main things required, it’s important to check with your term insurance company for specific requirements and to provide accurate information when applying for a single premium term insurance plan. Providing false information can result in the rejection of your claim in the event of an unfortunate event
Benefits of Buying a Single Premium Term Insurance Plan
People opt for single-pay term insurance as it offers several benefits to the policyholders such as:
Lower Premium Cost
A single premium term plan generally has a lower overall cost compared to a regular term plan with the same coverage amount and term.Convenience
With a single premium term plan, you only have to make one payment and do not have to worry about making regular payments over time.Easy To Budget
With a single premium term plan, you can easily budget your insurance expenses since the entire premium is paid upfront.Life Coverage
A single premium term plan provides life coverage for a specified term, typically ranging from 10 to 30 years. In the event of the policyholder’s death during the term of the policy, the designated beneficiary will receive a death benefit.Flexibility
Some single premium term plans offer the option to convert the policy to a permanent life insurance policy, such as whole life or universal life, without having to undergo a medical examination.Tax Benefits
The premiums paid for a term insurance policy are eligible for tax benefits.
Disadvantages of Single Premium Term Insurance Plan
While a single premium term insurance plan has several benefits, it also has some disadvantages, including:
Limited Coverage
A single premium term plan provides coverage for a specified term, typically ranging from 10 to 30 years only.No Premium Refunds
Once the premium is paid, it cannot be refunded, even if the policyholder cancels the policy or outlives the term.Large Upfront Payment
The premium for a single premium term plan must be paid in a single lump sum payment, which can be a significant financial burden for some individuals.Limited Options
Some insurance companies may have limited options for single premium term insurance policies, making it difficult to find a policy that meets your specific needs.No Policy Loans
Unlike some permanent life insurance policies, single premium term insurance plans do not offer the option to take out a loan against the policy’s death benefit.
Tax Benefits of Single Premium Term Insurance Policy
Single premium term insurance policies offer several tax benefits that can help policyholders save money and potentially reduce their tax liability:
Premium Tax Deduction
The premiums paid for a single premium term insurance policy offer tax benefits under the Income Tax Act.
Tax-Free Death Benefit
The death benefit received from a single premium term insurance policy is typically tax-free. This means that the beneficiaries of the policy will not have to pay taxes on the death benefit they receive.
Final Thought
Overall, single-premium term insurance is a good option for people who are looking for a convenient way to secure life insurance coverage for a set period, but it’s necessary to carefully weigh the pros and cons before purchasing a policy. It’s important to keep in mind that a single premium term plan is a long-term commitment, and once the premium is paid, it cannot be refunded. Before deciding to purchase a single premium term insurance policy, it’s important to carefully consider your financial situation and determine if it’s the best option for your needs.
Other Term Insurance Companies
Share your Valuable Feedback
4.6
Rated by 859 customers
Was the Information Helpful?
Select Your Rating
We would like to hear from you
Let us know about your experience or any feedback that might help us serve you better in future.
Written By: Himanshu Kumar
Himanshu is a seasoned content writer specializing in keeping readers engaged with the insurance industry, term and life insurance developments, etc. With an experience of 2 years in insurance and HR tech, Himanshu simplifies the insurance information and it is completely visible in his content pieces. He believes in making the content understandable to any common man.
Do you have any thoughts you’d like to share?