Term life insurance policies offer significant coverage and low premiums, making them an essential addition to your financial portfolio. Insurance providers have now started to offer more customized options to meet the needs of the customers. Anybody looking to purchase an insurance policy can now choose the premiums, terms, and coverage they want. A limited payment term plan (till a specific tenure) is one example of such customization.Read more
*Tax benefit is subject to changes in tax laws. *Standard T&C Apply
** Discount is offered by the insurance company as approved by IRDAI for the product under File & Use guidelines
We will understand Limited Pay till 60 in full detail in this article.
Insurance plans with limited pay offer you the opportunity to pay the insurance premiums only for a certain period. However, you'll still be covered for a long time after you cease paying your limited tenure premiums. Simply put, this feature gives you the benefits of lower premiums and continuous coverage.
For example, you purchase limited-term insurance for a tenure of 80 years but opt to pay premiums only for 60 years. In that case, you need to pay the premiums for 60 years, but the coverage will be extended up to 80 years. This means you don’t have to pay any premium for the remaining 20 years.
Generally, life and term insurance policies require that the policyholder pays dues for the entire policy period. In these cases, the term is equal to the premium payment duration. In the case of a limited-pay term plan till 60, however, the policy will be considered a fully-paid plan after the expiry date of the premium duration. The insured has full coverage throughout the policy, regardless of how long the premium period is.
This is a massive benefit for those in a volatile monetary environment, have flexible incomes, face unpredictable work environments, or are close to retirement.
You don't have to pay premiums for extended periods if you sign up for a limited premium payment plan until 60 years. This term plan option allows you to choose a longer coverage period that continues even after your retirement. You don't have the burden of paying premiums after your retirement. You can choose to have a more extended coverage term, which means that you will be able to enjoy more coverage.
Mentioned below are some of the top benefits of limited payment premium plans.
You don't have to pay premiums for your entire policy term. This is the main benefit of the limited-pay option. Your plan will continue to run for longer while you pay the premiums only for a short, pre-determined term. When planned well, limited premium plans can be a great way to pay off premiums while you are still working and saving money for retirement.
Premiums are due only for a specific period. This means that you don't have to put in the efforts of paying premiums regularly for a longer time. Your policy's chances of lapse are reduced because the premiums are paid off in a shorter time. Once the premiums have been paid off, you will be able to continue your coverage without any interruption.
It is normal to expect an increase in your annual premium if you only pay premiums for a certain period. Limited premium plans are more expensive than regular plans because premiums must be paid in a shorter time frame. The higher premium allows you to maximize the income tax deduction allowed by Section 80C. This section allows for deductions of up to Rs.1.5 lakhs. This section enables you to claim the maximum deduction if you do not have any other tax-saving expenditures or investments.
Due to the current work culture and freelance working practices, many people have a limited career span or expect to only earn for a brief period. These people might not be comfortable with the long-term premium obligations of a regular premium policy. Therefore, limited premium payment is worth looking into. They will be able to avoid long-term premium payments and remain covered even if their income is low or fluctuating.
A limited payment option with an annual premium payment choice and consistent monthly installment payout options can decrease the premium outgo. Here are some important points to know:
For people with a short career span or nearing retirement, limited pay till 60 can be a great option for extended risk protection. The only downside is paying higher premiums. However, everyone's life situation is different. Do not think that paying higher premiums is a non-profitable investment for you. If a limited premium pay seems to fit your lifestyle requirements, consider going for it.
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