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Should I prefer a regular (yearly) pay or LImited pay (10 year) for a 32 year term insurance policy
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21 Aug, 2021
by Ravi Malpani
For a 2 Crore Life cover Term insurance policy
- Regular pay option: Yearly Premium is Rs.33718. This needs to be paid for Policy term of 32 years
- LImited pay option: Rs. 68,815 to be paid for 10 years and Policy term will be 32 years
Which one should be preferred for a basic Pure term insurance (No CI rider, No Accidental Death Benefit, No Return of Premium, No waiver of premium etc.)
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21 Aug, 2021
Ravi Malpani
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22 Aug, 2021
CEO, Insurance Samadhan
Dear Ravi
It is always advisable to go for regular premium .
If you save Rs 30000 for 10 years in a mutual fund then you may get Rs 6 lakh after 10 year .
A systematic withdrawal of rs 33000 would fund your future premiums plus give you a corpus of approx Rs 5 lakh at the end of term .
Go for regular premium .
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Dear Ravi,
It is dependent on individual perspective how one sees the premium payment commitment. If one wants to get rid of premium payment commitment earlier it is advisable to go for limited premium payment.
However, if one looks at the maths it makes sense to stick to regular premium payment terms. One more factor that would influence sticking to regular premium paying term is you may get a policy at better price. In that case one can take a new policy and discontinue the old term plan.
It is advisable to stick to regular premium paying term. Hope you have had a look at the beshak ratings to compare the term plans from different insurers.