If you are one of those people, who think that life insurance plans bring financial liabilities, like regular premium payments, for a certain period of time, it is now time to change your thoughts. What you have always overlooked are the loads of benefits that come with life insurance plans. From comprehensive life cover to income tax benefits – so many benefits can be availed from a life insurance plan.
If you really hate to pay your premiums in installments, here’s a piece of good news for you. A number of Insurance providers in India offer single premium plans which allows you to pay only once and enjoy all the benefits of the policy throughout the policy tenure. LIC’s Single Premium Endowment Plan is one of them.
The most important advantage of buying LIC’s single premium endowment plan is that you will never have to be worried about your plan getting lapsed in case of timely payment failures.
When should you Purchase Single Premium Policy?
In order to buy a single premium policy, you need to pay a huge amount at one go. So, if you can afford to pay such a huge premium amount, you can go for this plan. With a single premium life insurance policy, you can invest your money in a right way and can secure the future of your family. Moreover, with this plan, you can target for higher life coverage as compared to regular premium paying insurance plan.
Tax Benefit under LIC’s Single Premium Paying Plan
A single premium paying life insurance policy helps you to save on taxes. Up to Rs1.5 Lakhs of your invested money is exempt from tax deduction under section 80C of the Income Tax Act. Moreover, the sum assured is also tax free. However, you should keep in mind that, in this policy, you can avail tax benefits only once as you are investing for a single time only.
No More Policy Lapses
Since you pay for the policy once and for all, you don’t have to worry again about the policy getting lapsed in case you forget to pay the premium. After paying the premium, the plan is valid till the entire tenure of the policy and renders the sum assured after the policy tenure comes to an end. You can create an asset for yourself when you make payment of a single premium on a policy. The insured can avail the loan facility anytime they want, during the policy tenure.
One of the major advantages of purchasing a single premium paying term is that you do not have to invest ever year, the cash value of your one-time investment gets accumulated over the years and turns into a huge amount at the time of maturity.
Features and Benefits
LIC Single-Premium Insurance Plan offers some special features. Let us highlight some of them below:
- This is a single premium endowment plan.
- Maturity benefit provided to the insured is sum assured+ accrued bonus.
- Within the policy tenure, the death benefit is sum assured + bonus.
- On maturity or on the death of the insured, simple reversionary bonus is payable.
- Large sum assured is available in this plan.
Guaranteed Additional Bonuses
Let us now discuss the guaranteed bonuses that come with LIC’s Single Premium Endowment Plan:
There are two types of bonuses available under the plan.
- At the end of every financial year, simple reversionary bonus is declared per thousand sum assured amount. Once declared, they form part of guaranteed benefit of the plan. The simple reversionary bonus accrued during the premium paying term and is paid till the end of the premium paying term. In case of earlier death, simple reversionary bonus is paid with final additional bonus, if any. After the premium paying term, no bonus is paid on death.
- In case the policy has run for a certain minimum period of time, final additional bonus may also be payable depending on the profits it has made.
If you have money with yourself and if you can afford to pay the entire premium at one go, LIC’s Single premium Insurance Plan can be your best bet. By locking your savings with this insurance plan, it will be easier for you to achieve your financial goals for future.
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