Single Premium Insurance Plan: Single Premium Insurance Plans are most popular in the community who don’t want to take burden or obligation in life for long term financial dues promises and want to live in present only, along-with managing the life’s risk cover.
In Life Insurance, there is no need to pay premium till the policy term, you can opt plans with single premium, in single premium insurance plan, you may get policy term upto 10 years and with handsome Sum-Assured. The Insurer specify the limit of sum assured. Mostly in Single Premium Insurance Plans, Insurer offer minimum sum assured as 1.25 times of the single premium paid or some times 1.10 times too.
The maximum sum assured for the lower age group can be upto 10 times of the single premium and minimum sum assured can be 1.10 times for higher age group. If sum assured not 10 times of the single premium, tax benefit will be lost in the particular plan.
Mostly Insurer offer Single Premium Insurance Plan in following insurances;
- Annuity Plan : In annuity plan, there is need of immediate returns to fulfill the need of monetary liquidity, pension etc. That is the main reason that almost all insurer offer this plan with Single Premium option.
- ULIP : In ULIP, Single Premium offered and provide Life Insurance Coverage till 10 years with maximum 10 times sum-assured and minimum 1.10 times sum-assured. In ULIP, you have rights to switching between funds as you want till 10 years to maximize your returns and can take services of Portfolio Managers as per the ULIP plan purchased by you.
- Endowment Plan : Endowment plan also on offer under Single Premium Insurance Plan, you can choose from the offered plans and can enjoy the benefits of Life Insurance and Lump-sum maturity and the end of policy term.
- Child Plan : Single Premium Plan also offered by some insurers for Child Plan and you can secure your child’s future by paying single premium.
Tax Benefits and Single Premium Insurance Plan : After 1st April 2012, there is a change in terms and conditions related to the Tax Exemption and Tax Free Returns, if Sum-Assured is not 10 Times of the Single Premium, then there will not be any Tax Benefits under section 80(c) and under section 10(10D), on the other hand, if sum assured is 10 times of single premium, you will enjoy the Double Tax Benefits under section 80(c) and under section 10(10D).