Insurance, gleanings and investment are the three words swinging around every corner during this tax saving season. Different companies come up with different policies and quotes, and then comes the decision making time for one and all. In the race of premium and plans, single premium plan is one of the leading racer where you just need to pay once and get insured for whole of your life. It has turned out to be blissful especially for people who tend to forget their premium payment dates or fear to have dissimilar economic conditions all time. So, for all those who hate the fuss of premium payment, single premium plan also known as one time investment plans is like a surprise gift. Now, there is no need to monthly, quarterly or annually submit premiums to insurance companies, instead you need to pay only once. Get detail for Single Premium Plans for 2015
What's the Condition?
The sum assured or the cover amount must be at least 5 times the premium of policy. The cover amount cannot be decreased except the final 2 years of the plan. The tax benefits on the premium of this policy are subjected under section 80C only if the amount is 20% of the sum assured or 5 times the cover amount.
Let's glance at the good and bad side of Single Premium Plans
Good Side
- One time or single premium plan is generally preferred over regular premium plans as it leads to substantial cost savings. A person can save up to 30% by paying premium once for the same cover amount.
- Keeping you away from the hassle of premium payments and remembering the due dates. Advantageous for those who are reluctant to pay premiums every now-and-then.
- Convenient for people who don't have a regular source of income, thereby saving you from getting their policy lapsed.
- Appropriate for those who are frequent travelers.
- Need to submit a large amount at the starting itself which saves your savings from getting lost in any other activity.
Bad Side
- It provides tax benefit only in the first year when the premium is paid and not in the consecutive years.
- You cannot alter the cover amount in any situation whether there is a salary increment or marriage.
Best Single Premium Plans
The best single premium plans available in the market are as follows:
1). LIC Jeevan Vriddhi
Here is the leader, LIC's Jeevan Vriddhi is the most popular single premium plan. The policy can be surrendered after an year with a payback up to 90% of the single premium. The sum assured in this plan depends largely on the age of the insured and the premium amount. Loyalty points, incentives on higher premium and availability of loan at an optimal interest rate are few other benefits of this single premium plan.
2). Bajaj Allianz New Risk Care II
This single premium plan is a pure term plan offering high insurance cover at very low premium. The premium is kept low as there are no maturity benefits. You have the liberty to decide your sum assured and policy term along with facility to choose additional riders and benefits.
3). ICICI Pru iAssure Single Premium
This single premium endowment plan offers life cover together with adequate risk returns. The maturity amount is generated on the basis of gender, age, policy term, sum assured multiple and applicable reference rates. The sum assured varies from 125% to 500% of the single premium.
4). Max New York SMART Steps Single Premium
Smart Steps is a child ULIP by Max New York which offers flexibility and liquidity. You can make investment in various funds like dynamic floor fund, frontline equity find, dynamic bond fund etc. This single premium plan can help you get tax benefits under section 80C and 10(10D) apart from maturity and death benefits.
5). Aviva Life Bond Advantage
Life Bond is a single premium ULIP with a minimum of Rs 50,000. It is applicable for tax benefits as the sum assured is 5 times the premium. This flexible plan comes with ADB (accidental death benefit) and provides top-ups to earn additional life cover. Even you can go for partial withdrawals after a lock in period of 5 years. And, if you stay with the policy for 10 years then you earn loyalty additions at 4% of fund value.
| Insurance company | Name of Plan | Type | Age limit | Policy term | Premium | Sum Assured |
|---|---|---|---|---|---|---|
| LIC | Jeevan Vriddhi | Endowment Plan | 8 - 50yrs | 10 | 30000 | 1,50,000 |
| Bajaj Allianz | New Risk Care II | Term Plan | 18 - 60yrs | 5 – 40 | 5,000 – No limit | 2,00,000 – No limit |
| ICICI Pru | iAssure | Endowment Plan | 8 – 75yrs (for a 5 yr policy term) 13 – 75yrs (for a 10 yr policy term) | 5 or 10 | 20,000 – No limit | Single premium x 1.25 |
| Max New York | SMART Steps | Child ULIP | 21 – 50yrs 3 months – 15 yrs | 10 – 25 | 50,000 – 3,00,000 3,00,000 and above | Single Premium x 5 |
| Aviva | Life Bond | ULIP | 2 - 65yrs | 10 – 73 | 50,000 – No limit | Single premium x 5 (option A) Single premium x 1.2 (option B) |
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