Life Insurance
Financial Planning
2024-05-14 5 Min read
0
The aim of buying a term insurance plan is to give your loved ones financial security in case something happens to you. While term insurance is an ideal way to secure the future of your family, there are certain things that you need to carefully plan before you invest in one. The first few questions that you need to answer are: How much coverage do I need, what will be the policy term, who will be the beneficiary, how much will the premium be, and will I be able to afford the premium?
When buying term life insurance, you need to choose a term for which you require coverage. You pay a premium amount to your life insurance provider, and in turn, they offer you the coverage. In case you pass away during the policy term, your nominee will receive the death benefit, typically in a lump sum amount. If you survive this term, the policy will come to an end, and there will be no payout. This is how a pure-term insurance plan works.
Protect Shield Plus: Continued term insurance coverage
Protect Shield Plus is a pure-term insurance plan. When you invest in this non-linked, non-participating term plan, you commit to the financial security of your loved ones. Protect Shield Plus has a long list of benefits. However, one of its major advantages is that it comes with a high maturity age. When you invest in Protect Shield Plus, you can stay invested until you turn 80.
Short premium payment option with Protect Shield Plus
When you choose the policy term, you also need to decide how long you want to pay the premium. With Protect Shield Plus, you can pay the premium in the following ways:
1.Single pay
The premium is paid in one lump sum. At the time of purchasing the term insurance plan, you need to clear all the premium payments upfront. This keeps you off any further premium-paying liability. However, since it is a single-time payment, you do not have the option of gradual payment for a decreased premium burden.
2.Limited pay
One of the ideal choices for term insurance premium payment can be limited pay. With SUD, you get the option of limited payment, which allows you to break down the entire premium amount in certain frequencies. You have the freedom to choose the tenure of the limited pay. The options available are:
● 5 years
● 7 years
● 10 years
● 12 years and
● 15 years.
Suppose you choose the option of 10 premium payment terms. You have to pay all the premiums within 10 frequencies. After this, you do not have to make any payment, but rest assured, you will receive continued coverage until the policy tenure.
3.Regular pay
Regular pay, as the name suggests, is a continuous premium payment term. With regular pay, the policyholder has the flexibility of paying the premium in small amounts throughout the policy tenure. Although it can help you with low premium payments, you have the premium payment liability throughout the policy tenure.
1.Single pay
The premium is paid in one lump sum. At the time of purchasing the term insurance plan, you need to clear all the premium payments upfront. This keeps you off any further premium-paying liability. However, since it is a single-time payment, you do not have the option of gradual payment for a decreased premium burden.
2.Limited pay
One of the ideal choices for term insurance premium payment can be limited pay. With SUD, you get the option of limited payment, which allows you to break down the entire premium amount in certain frequencies. You have the freedom to choose the tenure of the limited pay. The options available are:
● 5 years
● 7 years
● 10 years
● 12 years and
● 15 years.
Suppose you choose the option of 10 premium payment terms. You have to pay all the premiums within 10 frequencies. After this, you do not have to make any payment, but rest assured, you will receive continued coverage until the policy tenure.
3.Regular pay
Regular pay, as the name suggests, is a continuous premium payment term. With regular pay, the policyholder has the flexibility of paying the premium in small amounts throughout the policy tenure. Although it can help you with low premium payments, you have the premium payment liability throughout the policy tenure.
Long-term protection with a short premium payment option
Now that we have discussed different types of premium payment terms let’s delve deeper into limited pay. Read on to understand how you can enjoy long-term life insurance protection with short-term premium payment and various associated benefits:
1.Pay for a limited tenure
As discussed above, limited premium payment terms, also known as short-term premium payment, can be quite beneficial for you. You do not have to bear the burden or premium payment throughout the policy but can complete it in a few payments. However, the life insurance protection remains the same, that is, even after the premium payment is made.
2.Added flexibility
Limited pay allows you the freedom to choose a term you find most comfortable. With Protect Shield Plus, you have the flexibility to choose a limited pay term that adheres to your financial comfort. It ranges from 5, 7, 10, 12, and 15-year frequency.
3.Fewer chances of policy lapse
In a long-term premium payment commitment, there are high risks of losing the policy. There can be various reasons for this. You may either miss a premium payment or no longer find it financially comfortable to fulfill the premium commitments etc. However, the chances of losing a policy are minimized with limited pay since you do not have to keep paying for the long term.
4.Widen the tax benefits
Tax benefits offered against term insurance premium payment can also be widened with limited pay. Since you might have to pay a higher premium in limited pay compared to regular pay, you can avail of a higher tax benefit under Section 80C of the Income Tax Act.
5.An ideal option for people with a short career span
All those people who have a short career span or cannot comply with long-term premium payment terms can make the most of the limited pay option. For example, an actor or a sportsperson, who may have a short career span of 10 or 15 years, may find a limited pay option suitable. Or maybe you may want to pay off all your premiums before you hit retirement.
6.Relax in your retirement
With limited pay options, when you purchase a term plan at an early age, you can relax in your retirement. Since limited pay requires premium payment in limited frequencies, you can relax in your retirement phase of life.
1.Pay for a limited tenure
As discussed above, limited premium payment terms, also known as short-term premium payment, can be quite beneficial for you. You do not have to bear the burden or premium payment throughout the policy but can complete it in a few payments. However, the life insurance protection remains the same, that is, even after the premium payment is made.
2.Added flexibility
Limited pay allows you the freedom to choose a term you find most comfortable. With Protect Shield Plus, you have the flexibility to choose a limited pay term that adheres to your financial comfort. It ranges from 5, 7, 10, 12, and 15-year frequency.
3.Fewer chances of policy lapse
In a long-term premium payment commitment, there are high risks of losing the policy. There can be various reasons for this. You may either miss a premium payment or no longer find it financially comfortable to fulfill the premium commitments etc. However, the chances of losing a policy are minimized with limited pay since you do not have to keep paying for the long term.
4.Widen the tax benefits
Tax benefits offered against term insurance premium payment can also be widened with limited pay. Since you might have to pay a higher premium in limited pay compared to regular pay, you can avail of a higher tax benefit under Section 80C of the Income Tax Act.
5.An ideal option for people with a short career span
All those people who have a short career span or cannot comply with long-term premium payment terms can make the most of the limited pay option. For example, an actor or a sportsperson, who may have a short career span of 10 or 15 years, may find a limited pay option suitable. Or maybe you may want to pay off all your premiums before you hit retirement.
6.Relax in your retirement
With limited pay options, when you purchase a term plan at an early age, you can relax in your retirement. Since limited pay requires premium payment in limited frequencies, you can relax in your retirement phase of life.
Conclusion
Premium payment is one of the basic concerns when purchasing a life insurance policy. With SUD Protect Shield Plus, you get the benefit of choosing a premium payment term that best suits your needs. With limited pay, you neither have the stress of one-time payment nor the burden of continued premium payment throughout the policy tenure. This is the mid-way that can help manage your finances today while assuring future financial security for the long term.
Reference
● https://www.hdfclife.com/insurance-knowledge-centre/term-insurance/benefits-of-limited-premium-payment-term-plans
● https://www.canarahsbclife.com/blog/term-insurance/limited-pay-vs-regular-pay-insurance#:~:text=The%20primary%20benefit%20of%20limited,plan%20keeps%20running%20for%20longer.
Reference: SUD LIFE PROTECT SHIELD PLUS UIN: 142N088V02
● https://www.canarahsbclife.com/blog/term-insurance/limited-pay-vs-regular-pay-insurance#:~:text=The%20primary%20benefit%20of%20limited,plan%20keeps%20running%20for%20longer.
Reference: SUD LIFE PROTECT SHIELD PLUS UIN: 142N088V02
Disclaimer
Star Union Dai-ichi Life Insurance Company Limited is the name of the Insurance Company and “SUD Life Protect Shield Plus” is the name of the plan. Neither the name of the Insurance Company nor the name of the plan in anyway indicates the quality of the plan, its future prospects or returns SUD Life Protect Shield Plus Plan is a term plan and does not offer any maturity benefits.
SUD Life Protect Shield Plus | UIN: 142N088V01 | A Non-Linked Non-Participating Pure Risk Premium Individual Life Insurance Plan Star Union Dai-ichi Life Insurance Company Limited |IRDAI Regn. No: 142 | CIN: U66010MH2007PLC174472
Registered Office: 11th Floor, Vishwaroop I.T. Park, Plot No. 34, 35 & 38, Sector 30A of IIP, Vashi, Navi Mumbai – 400 703 | Contact No: +91 22 7196 6200 | 1800 266 8833 (Toll Free) | Timing: 9:00 am – 7:00 pm (Mon – Sat)| Email ID: customercare@sudlife.in | Visit: www.sudlife.in | For more details on risk factors, terms and conditions, please refer to the sales brochure carefully, before concluding the sale. |Trade-logo displayed belongs to M/s Bank of India, M/s Union Bank of India and M/s Dai-ichi Life International Holdings LLC and are being used by Star Union Dai-ichi Life Insurance Co. Ltd. under license.
SUD Life Protect Shield Plus | UIN: 142N088V01 | A Non-Linked Non-Participating Pure Risk Premium Individual Life Insurance Plan Star Union Dai-ichi Life Insurance Company Limited |IRDAI Regn. No: 142 | CIN: U66010MH2007PLC174472
Registered Office: 11th Floor, Vishwaroop I.T. Park, Plot No. 34, 35 & 38, Sector 30A of IIP, Vashi, Navi Mumbai – 400 703 | Contact No: +91 22 7196 6200 | 1800 266 8833 (Toll Free) | Timing: 9:00 am – 7:00 pm (Mon – Sat)| Email ID: customercare@sudlife.in | Visit: www.sudlife.in | For more details on risk factors, terms and conditions, please refer to the sales brochure carefully, before concluding the sale. |Trade-logo displayed belongs to M/s Bank of India, M/s Union Bank of India and M/s Dai-ichi Life International Holdings LLC and are being used by Star Union Dai-ichi Life Insurance Co. Ltd. under license.
Beware of spurious or fraud phone calls
IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.
