Prices Increasing soon Prices Increasing Soon

Term Insurance: Limited Pay vs Regular Pay

Premium payment is one of the crucial parameters that govern the decision of buying insurance policies. It is required to fit into your budget so that the policyholder continues it for the long term and the policy remains active. In comparison to other life insurance services and products, term insurance is way more economical and pocket-friendly. However, the premium payment mode is a contributing factor to its cost-effectiveness. Let’s understand the premium payment options that suit your requirements.

Read more
Gets ₹1 Cr. Life Cover at just
COVID-19 Covered
The Policybazaar Advantage
Dedicated claim support for family FREE
Upto 10% discount for buying online
Only certified experts will call you on 100% recorded lines
We are rated~
58.9 Million
Registered Consumer
Insurance Partners
26.4 Million
Policies Sold

#All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply

By clicking on "View plans" you agree to our Privacy Policy and Terms of use

~Source - Google Review Rating available on:-

Life is Unpredictable! Protect your family’s future
Get ₹1 Crore Life cover starting from ₹384/month+
We don’t spam
Check Your Premium Now
Please wait. We Are Processing..
Get Updates on WhatsApp
The Policybazaar Advantage
Policybazaar Advantage Icon
Dedicated claim support for family FREE
Policybazaar team will help and support you at the time of claim. A personal claim handler from our team of experts will get in touch with you when your nominee applies for a claim on our website.
Policybazaar Advantage Icon
100% calls recorded to ensure no mis-selling
We will make sure you get what is promised by the advisors. We conduct regular monitoring of our calls to make sure you get the best experience.
Policybazaar Advantage Icon
Exclusive lifetime discount upto 5% for buying online
The discounts will be valid for the entire policy payment term and is not available if you choose to buy the insurance through offline agents.
Policybazaar Advantage Icon
Advisors available in your city
Our advisors are available in more than 55 cities across India and can help you at your doorstep in understanding the plans and in documentation.
Policybazaar Advantage Icon
Refund at the click of a button
In case you aren’t happy with your purchase, you can cancel your policy hassle-free at the click of a button. We will help you with the cancellation and refund of your policy.

What is a Premium Payment Term (PPT)?

PPT is the total number of years, a policyholder is required to pay the premiums. It can be equivalent to less than the policy term. For example, if a policyholder buys a term life insurance for 20 years, then the premium payment term can be of 20 years or less. In this case, 20 years is the policy tenure for the term insurance plan.

What Are the Different Types of Premium Payment Options in Term Insurance?

Following are the premium payment options offered by term insurance policies:

  • Regular Pay, where the premium payment term is equal to the policy term

  • Limited Pay, where the time provided to pay premiums is lower than the duration of life cover

  • Single Pay, where only a one-time lump sum amount payment is allowed

While buying an insurance policy, policyholders have to choose the right mode of paying premiums. Here’s a quick description of both the premium payment options.

What is Regular Pay Term Insurance?

In regular pay, the life assured is required to pay the premium for the complete policy tenure. It provides insured the flexibility to choose his/her premium paying option i.e., yearly/ half-yearly/ or monthly. In this, the premium payment term (PPT) is equal to the policy term.

For example, Sheetal of 40 years buys a regular pay term insurance plan for 30 years. Now, Sheetal will pay premiums for the complete policy period and get the coverage for 30 years.

What is Limited Pay Term Insurance?

In this, the insured makes periodic payments for a pre-decided limited period. The duration of paying premiums is less than the policy term. Though the complete coverage remains intact throughout the policy time. The policyholder can pay their premiums when they have sufficient funds. In limited pay, the premium debts are more than that of regular pay.

Let’s understand this with the help of an example:

Ridhi, 40 years old works in an IT company and buys a term plan for 20 years for her future protection. She wants to get retire at 55 years of age and henceforth, wishes to pay all her due premium in 10 years from this year only. In such a situation, Ridhi is only required to pay a premium for 10 years i.e., till 50 years of age. After which she is not required to pay any premium to the insurer but the coverage will continue for complete 20 years.

Regular Pay Term Insurance Vs. Limited Pay Term Insurance

One should always be aware of the features and benefits of the insurance policy before buying it. Here the table illustrates the comparative analysis between limited and regular pay:

Benefit Type Regular Pay Term Insurance Limited Pay Term Insurance
Premium payment time Continuing and long-term commitment all over the policy It is shorter than the policy term and pays premiums for a pre-specified period
Coverage It offers total coverage for the complete policy term. In this case, purchasing long coverage after the retirement age can be challenging financially. Regardless of limited premium payment, it offers extended coverage. It also allows long coverage after the retirement age.
Premium Premium increases with the age Premiums are required to be paid in a set time and do not increase proportionately with age.
Financial Burden Financial load distributed evenly across the complete policy term Financial stress for a specific period
Tax Benefits Tax benefits get splits across the years and only limited deductions are offered under this plan. It offers to maximize deduction in tax under section 80 C of the Income Tax Act 1961.
Surrender If in case the life assured wants to surrender the policy shortly, then he/she suffers no loss. They also receive an adjusted value from the insurer It offers no option to terminate the policy due to the non-payment.
Policy Lapse Upon the policy lapse, no benefit is paid to the policyholder because of premium evasion The probability of policy lapse is very less because of the shorter payment time
Payments The expenses and payments are long-lasting even after the retirement age The policyholder is not required to pay after a specific time and it does not extend after retirement.
Discounts Regular pay offers no rewards or discounts on paying premiums In Limited Pay, you can save 55 percent premiums due to advance payments

How to Choose The Right Premium Payment Option?

The selection between Limited Pay and Regular Pay: Term Insurance depends on your ability to pay and your life stage.

This Limited Pay option is suitable for individuals:

  • Who have short career spans such as sportsperson

  • Who works in unpredictable surroundings such as the army

  • Professionals or Business owners who don’t have a fixed income

  • Who is near retirement age but needs coverage up to higher age

Regular Pay

  • Individuals having fixed income might find the period payment easier.

  • This mode is also helpful if you are a salaried employee.

  • If you are young aged and looking for plan coverage till the age of your retirement.

In A Nutshell!

Policyholders should always choose a plan after analyzing the features and benefits of Limited and regular. Both have their advantages and disadvantages, but the selection of plans entirely depends on the suitability of the customer such as their future income, financial plan, etc. Nowadays, it is important to be insured with term insurance to protect your family against any financial challenges during critical times.

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

“Tax benefit is subject to changes in tax laws. Standard T&C apply.”

Premium By Age

Choose Term Insurance Plan as per you need

Plans starting from @ ₹473/Month*
Term Insurance
4 crore Term Insurance
Term Insurance
6 Crore Term Insurance
Term Insurance
7 Crore Term Insurance
Term Insurance
7.5 crore Term Insurance
Term Insurance
8 Crore Term Insurance
Term Insurance
9 crore Term Insurance
Term Insurance
15 Crore Term Insurance
Term Insurance
20 Crore Term Insurance
Term Insurance
25 Crore Term Insurance
Term Insurance
30 Crore Term Insurance
Term Insurance
15 Lakh Term Insurance
Term Insurance
60 Lakh Term Insurance

Term insurance Articles

  • Recent Article
  • Popular Articles
02 Jul 2024

Term Life Insurance in Daman and Diu 2024

Daman and Diu, a union territory in western India, consists of

Read more
02 Jul 2024

Term Life Insurance in Andhra Pradesh 2024

Andhra Pradesh, a state in the southern coastal region of India

Read more
02 Jul 2024

Term Life Insurance in Sikkim 2024

Sikkim is a Northeastern Indian state bordered by Bhutan, Tibet

Read more
02 Jul 2024

Term Life Insurance in Punjab 2024

Punjab, also known as the Land of Five Rivers, is situated in

Read more
02 Jul 2024

Term Life Insurance in Chhattisgarh 2024

Chhattisgarh is a state known for its forests, majestic

Read more

Term Insurance for Women in India

Term insurance for women is a type of life insurance specifically designed for fulfilling women’s needs and

Read more

'Har Family Hogi Insured' Policybazaar's Vision...

Empowering Every Household: policybazaar's Commitment to Nationwide Coverage In a visionary move towards a

Read more

2 Crore Term Insurance Plan

Individuals can choose to buy term plan that offers a life cover (sum assured) of ₹ 2 crore. These plans are

Read more

What Is Saral Jeevan Bima

Saral Jeevan Bima (SJB) is a simple term insurance plan that offers financial protection for policyholder’s

Read more
Need Help? Request Callback
View Plans
Download the Policybazaar app
to manage all your insurance needs.