Difference Between Policy Term And Premium Paying Term

When buying life insurance, two terms that often confuse people are policy term and premium paying term. Both significantly affect how long your coverage lasts and how much you pay. The policy term simply means the duration for which your life cover remains active, while the premium paying term refers to the period during which you are required to pay premiums. Knowing the difference helps you pick the right combination based on your income, financial responsibilities, and future goals. Let's understand this in detail.

51 Partners Insurance Partners

10.5 Crore Registered Consumer

5.3 Crore Policies Sold

We are rated ++ rating

₹1 Crore Life cover starting from ₹478/month⁺

Lowest Price Guarantee ^˜

Male

Female

Name

Date of Birth

Mobile Number

Check Your Premium Now

Get Updates on WhatsApp

What is the difference between policy term & premium paying term?

The policy term is the total tenure for which your life insurance coverage remains active, while the premium payment term is when you must pay premiums to keep the plan active.

The premium-paying term can be equal to or less than the policy term. If premiums are not duly paid according to the chosen premium-paying term and frequency, coverage shall cease before the end of the policy term.

Term Plans

₹1
Crore

Life Cover

@ Starting from ₹ 13/day⁺

₹50
LAKH

Life Cover

@ Starting from ₹ 8/day⁺

₹75
LAKH

Life Cover

@ Starting from ₹ 12/day⁺

What is the Policy Term?

Life insurance policies cover your life only for a specific period of time, except for whole life insurance plans. You can choose to remain covered for 5 years, 10 years, 20 years, and so on. This period is called the policy term. It is an important concept in term insurance because such policies only cover deaths that occur during the policy term and not after. No benefit shall be paid to the nominees of a term cover after the end of the policy term.

Endowment plans on the other hand offer maturity benefit to the policyholders should they survive the policy term.

In order to keep the policy active and the life cover in force throughout this period, you are required to pay premiums. This brings us to the premium payment term.

Note: Know more about what is term life insurance first and then buy a term plan for your loved ones.

Secure Your Family Future Today

₹1 CRORE

Term Plan Starting @

Get an online discount of upto 15%^#

Compare 40+ plans from 15 Insurers

⁺Standard T&C Applied

What is the Premium Paying Term?

Now, premiums are what you pay to keep the policy in force. The premium paying term meaning is the period during which due premiums have to be paid. There are two variants to choose from:

Regular Premium Paying Term - If it is equal to the policy term, premiums are to be paid for the entire policy duration. This is known as regular premium payment. For instance, if the policy term is 20 years, premiums will have to be paid for 20 years.
Limited Premium Paying Term - The other scenario is when the premium paying term is less than the policy term. In such cases, you pay premiums for a limited period, but the life cover continues till the end of the policy term. For instance, you can choose a policy term of 20 years but pay premiums only for the first 10 years of it.

The frequency of premium payment in both cases can be monthly, quarterly, half-yearly, or yearly.

There is also a third variant viz. single premium payment which requires you to pay a lump sum premium amount for the entire period of coverage.

Note: It is suggested to calculate the term plan premium on the term policy calculator online tool by Policybazaar before buying.

How to Choose the Right Policy Term and Premium Paying Term?

Understanding the premium paying term meaning is only half the job done. The real task is choosing the right mix of policy and premium paying terms based on your financial stage. If you are young and just starting in your career, opting for an extended policy term with a regular premium structure ensures steady payments spread over many years. On the other hand, if you have high disposable income today but expect reduced cash flow in the future, a limited premium option may be more suitable. Always ensure your policy term covers you till your retirement years so your family is financially secure even when you no longer have active income.

Wrapping It Up:

Remember to pick a longer policy term to ensure coverage for a longer time. If you are 20 years old and your policy term was for 20 years, you will only have protection till the age of 40. Buying a new plan at this age will incur higher premiums as the risk profile increases with age. Now that you have a good idea of the difference between policy term and premium paying term, you are in a good position to choose the best life insurance policy for yourself.

Note: You should also check the benefits of term insurance if you are planning to purchase the term insurance plan.

Note: Check out the best term life insurance in India and choose one that suits your requirements.

People also search for

What is Term Life Insurance

FAQs

Q1. Can I increase the policy term once my life insurance plan has started?

Ans: No, you cannot increase the policy term after issuing the plan. That’s why it’s essential to carefully choose a term that covers you until your retirement years before buying.
Q2. What is the premium paying term meaning in simple words?

Ans: The premium paying term means when you need to pay premiums to keep your policy active. Once you complete this payment duration, the life coverage will continue for the rest of the policy term if you choose a limited premium option.
Q3. Which is better: regular premium or limited premium paying term?

Ans: It depends on your financial situation. A regular premium-paying term works well if you prefer smaller, spread-out payments over the entire policy term. A limited premium-paying term is ideal if you want to finish paying early while still enjoying coverage for the full policy duration.

Different types of Plans

Term Insurance

View Plans

Life Insurance

View Plans

List of Term Insurance Companies

View Plans

TROP

View Plans

Term Insurance For Senior Citizen

View Plans

Term Insurance For Spouse

View Plans

Term Insurance For Family

View Plans

Term Insurance For NRI

View Plans

List of Term Insurance Plan

View Plans

Life Insurance Corporation of India

View Plans

What is Term Insurance?

View Plans

Term Insurance Calculator

View Plans

1 Crore Term Insurance

View Plans

2 Crore Term Insurance

View Plans

Explore the popular searches and stay informed

˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Rs. 400/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 400/month (Rs.13/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 230 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 12/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 497/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 487/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 626/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 905/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,267/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

*The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy.

+Rs. 447/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs.679/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 910/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,924month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

Women

+Rs. 400/month is Starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 461/month is the starting price for a 1 crore term life insurance for an 24 year-old female, non-smoker, with no pre-existing diseases, cover upto 54 years of age.

1,642/month is the starting price for a 1 crore term life insurance for an 44 year-old female, non-smoker, with no pre-existing diseases, cover upto 74 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881

For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale

Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.

˜ Policybazaar Promise reflects the guarantee offered by insurers. Price assurance is based on certifications shared by insurers with us.