When it comes to securing your financial future through life insurance, the LIC stands out as a reliable choice. Among the various terms and conditions associated with LIC policies, the concept of Annualized Premium plays a crucial role. In this article, we’ll explore what Annualized Premium means, how it impacts your policy, and why it’s essential to understand it thoroughly.
Read moreThe LIC Annualized Premium is the total premium amount that is paid in a year for a life insurance policy. It includes the base premium plus any additional premiums or riders that you opt for, all calculated on an annual basis. This premium is crucial as it determines the coverage and benefits provided under the policy.
The calculation of the Annualized Premium for LIC policies involves several factors:
Sum Assured: The guaranteed amount payable upon death or maturity.
Policy Term: The length of time the policy remains active.
Age of the Insured: The age at which the policyholder purchases the insurance.
Premium Payment Mode: Whether you choose annual, semi-annual, quarterly, or monthly payment options.
For instance, if you have a policy with a sum assured of ₹10 lakh and you choose an annual premium payment mode, the Annualized Premium will be the total amount you need to pay each year to keep your policy in force.
Budget Planning: Knowing your Annualized Premium helps in planning your yearly budget. It allows you to allocate funds appropriately to ensure timely payment of premiums.
Policy Continuity: Regular payment of the Annualized Premium ensures that your policy remains active and you continue to enjoy its benefits.
Benefits Calculation: The amount of Annualized Premium affects the maturity benefits and claims you can receive. A higher premium may lead to higher returns or coverage.
Cost-Efficiency: Paying premiums annually is often more economical compared to monthly or quarterly payments due to lower administrative charges.
Simplicity: Managing one annual payment is simpler than handling multiple smaller payments throughout the year.
Financial Discipline: It encourages saving every year and helps in maintaining a disciplined approach towards premium payments.
Understanding the LIC Annualized Premium is vital for effective financial planning and maintaining your life insurance policy. By grasping how it works and its implications, you can ensure that your policy remains active and continues to provide the coverage and benefits you need. For personalized advice and calculations, consult with an LIC agent or financial advisor to make the most out of your life insurance plan.
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*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
++Returns are 10 years returns of Nifty 100 Index benchmark
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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