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Buy Regular Premium Term Insurance Plan in India

If you are looking to protect your family’s financial future, understanding a regular term insurance plan is essential. It is a type of life insurance that provides life coverage along with certain additional benefits at an affordable price. It ensures financial security for your loved ones in case of unforeseen circumstances during the policy term.

The following section explores all aspects of term insurance, its benefits, features, mistakes, etc.

What is a Regular Premium Term Insurance?

A regular premium term is a term insurance policy in which the policyholder is required to pay the premium amount at a regular time interval, such as yearly, half-yearly, quarterly, or monthly.

In return, the insurer provides life coverage for a specified term. If the policyholder passes away during the policy tenure, the nominee receives the sum assured, ensuring financial security for the family.

How Does Regular Premium Term Plan Work?

The regular premium term is a type of life insurance policy that covers the life of the policyholder and takes financial responsibility for the nominees in case of the policyholder's accidental or untimely death.

The working of a regular premium term insurance plan is straightforward:

1. Choose the Policy Details

You decide the sum assured, policy term, and premium payment frequency.

2. Pay Premiums Regularly

You pay the premiums periodically as per the chosen frequency.

3. Coverage Duration

The policy provides life cover for the selected term.

4. Death Benefit

If the insured passes away during the policy term, the nominee receives the sum assured.

5. Maturity

If the insured survives the policy term, no benefit is paid unless the plan includes a return of premium feature.

Illustration of Regular Premium Term Insurance

Sabyasachi purchased a regular premium term insurance plan to ensure his family's financial security. He opted for a ₹1 crore term insurance policy with a 20-year term. The annual premium for this policy was ₹10,000.

Hence, to claim all the benefits, he would have to pay the premium yearly, failing which the company would offer him a grace period. If he fails to pay even within the grace period, the policy will lapse.

Sabyasachi paid his premiums regularly every year. Unfortunately, at the age of 45, he met with an untimely accident and passed away. Since Sabyasachi had a term insurance plan, his family received the sum assured of ₹1 crore from the insurance company.

Who Should Consider Regular Premium Term Insurance?

The following types of people should consider the regular premium term:

Professional Earners

People who have a steady job, earn a decent amount of money at regular intervals, and can afford the premiums should consider buying regular premium term insurance plans.

Tax Savers

People who pay a lot of tax annually can opt for regular premium terms to receive tax deductions.

Retirement Planning

People who want to cover their complete age till retirement should consider buying the regular premium term plans.

Parents

Parents can use term insurance to secure their children’s future and ensure they have the financial resources for education and other needs.

Homeowners with Loans

A term insurance plan ensures your family won’t have to bear the burden of home loans or other liabilities if something happens to you.

Business Owners

Entrepreneurs can use term insurance to ensure business continuity and repay debts in case of their untimely demise.

Features and Benefits of Regular Premium Term

The following section lists certain benefits and features of a regular premium term plan:

Simplicity

The terms and conditions of a regular term plan are quite easy to understand. No complex clauses are included; you mainly pay a premium against your life coverage.

Add-on Riders

Regular term plans come with add-on riders that help policyholders get maximum benefits from a term insurance policy. The riders are available at a very nominal price.

Affordable Premiums

Compared to other types of life insurance, term insurance plans offer premiums that are quite affordable for common people. The earlier the policy is bought, the lower the premium.

Flexible Premium Payment Modes

You can choose from various payment frequencies: monthly, quarterly, half-yearly, or annually. This allows you to manage your finances better.

High Sum Assured

These plans provide a significant sum assured at a relatively low cost, ensuring your family is financially protected even in your absence.

Policy Term Customization

You can select a policy term that aligns with your financial goals, such as covering your family until your children become financially independent.

Tax Benefits

You can avail yourself of the various tax deduction benefits under Section 80(C) and 80(D) when you opt for regular-term premium plans.

Return of Premium

If the policyholder opts for term insurance with return of premium option, he will receive a maturity benefit. However, the premiums will be a bit higher in that case.

When to Invest in a Regular Premium Term Plan?

You should start investing in a regular premium term plan as soon as you start having a steady salary. However, you might want to keep the following points in mind before you start investing:

Check the Affordability

Regular-term plans have lower premiums than single premiums, making them more accessible for everyone.

Go Through the Tax Benefits

When choosing a regular term plan, you simultaneously spread your tax deductions across your earning period.

Have a Steady Earning

When you have a stable income, the regular premium plan helps you comfortably pay premiums at regular intervals.

Check the Coverage Periods

Regular premium term plans generally opt for longer term periods. These plans cover the needs of your family until they are financially independent.

What are the Types of Term Insurance Premiums?

There are mainly 6 types of term insurance premiums, including the regular premium term insurance. The types of term insurance premiums are discussed in the following table:

Premium Type	Description
Regular Premium	The policyholder pays the premium throughout the term at regular intervals, such as yearly, half-yearly, quarterly, or monthly, regardless of whether the amount remains fixed or varies.
Limited Premium	The premium payments are made for a shorter period within the term. For example, in a 10-year term insurance policy, the premiums can be paid for the first 5 years, and you can stay free for the next 5 years.
Single Premium	The premium is paid as a lump sum at the start of the policy, and the policyholder enjoys the benefits until the end of the term.
Level-Term or Level Premium	The premiums are paid at regular intervals to keep the policy active. The premium value remains the same throughout the term.
Decreasing Term Premium	The insured pays a flat, constant premium, but the death benefit decreases following a timetable with each passing year.
Yearly Renewable Term Premium	The plans renew every year, increasing the premium value with age. However, there is no predetermined term.

Things to Consider While Choosing a Regular Paying Term Insurance Plan

The following things should be kept in mind while choosing a regular paying term insurance plan:

Assess Your Needs

Before jumping on to buy a term insurance plan, analyse its core purpose. The main purpose of term insurance is to have financial security. So, you only choose to buy a regular-paying term insurance plan if you have dependants or anticipate it in the coming future.

Choose the Right Coverage

When you choose a term insurance plan, make sure the amount you choose provides adequate coverage for your family. Consider every liability, loan, and expense you currently have and decide on the right sum.

Commit to Regular Payments

The premiums need to be paid for a long time, and once you opt for term insurance, you need to keep in mind that it is a commitment for a long duration. Missing even a single payment of a premium will result in the lapse of your policy.

Select a Payment Frequency

Here, you need to choose the frequency at which you want to pay your premiums. You can pay the premiums yearly, half-yearly, quarterly or monthly. Set up an auto-debit to ensure premium payment is on time.

Consult a Financial Advisor

Buying term insurance is to make sure that your family does not face any kind of financial problem in the event of your untimely death. Hence, getting in touch with a credible financial advisor helps you to make the best choice according to your income.

Conduct Thorough Research

You must conduct detailed research and compare it with every known insurance company so as to find the best deal for you. Compare various aspects such as benefits, drawbacks, etc. and make an informed decision.

Determine the Policy Term

When deciding the duration of the policy, consider your present expenses, income and savings. Then, anticipate the age by which you will complete all your financial obligations, and till that age, you will need your term insurance.

How to Buy a Regular Premium Term Insurance Plan?

Buying a regular premium term insurance plan is a simple process:

Step 1: Use online tools to compare various plans, focusing on premiums, features, and benefits.

Step 2: Calculate the sum assured based on your current income, liabilities, and future financial goals.

Step 3: Look for a company with a high claim settlement ratio, good customer service, and competitive premiums.

Step 4: Fill the form with accurate information about your age, income, medical history, and lifestyle habits.

Step 5: Select your preferred premium payment mode and complete the payment.

Step 6: After approval, the insurer will send you the policy document, either digitally or physically.

Common Mistakes to Avoid While Buying Regular Term Plan

Go through the following section to learn the common mistakes that people make while buying regular-term plans:

Ignoring the Terms and Conditions

You must read every detail related to your regular term plan thoroughly to get an idea of what you are signing up for. Go through every line and every word, get your doubts clarified by the company's employees, and then make your decision.

Choosing Excessive or No Riders

Buying an excessive number of riders along with your regular term plan may result in a very high premium value, which may look unreasonable in the future. Hence, assess your condition and buy riders to get the maximum benefit out of your term plan.

Improper Research

Conducting thorough research before buying a regular term plan will help you lock in the right sum and an affordable premium. Compare the plans offered by various other insurance companies and then choose one.

Choosing Insufficient Period

Cover your maximum age to extract the most benefit from a term insurance plan. Even though shorter time periods have lower premiums, they get increased when you renew them down the line.

Determining Insufficient Sum

The main purpose of a term insurance plan is to provide financial coverage to your family in case of your death based on your present income and lifestyle. Hence, if you spend less money, your family may find it difficult to maintain their lives after you.

A regular premium term insurance plan is an excellent way to safeguard your family’s financial future. It offers affordable coverage, flexible payment options, and peace of mind, making it a must-have in your financial portfolio.

By carefully assessing your needs, comparing plans, and selecting the right insurer, you can ensure that your loved ones remain financially secure even in your absence.

Take the first step toward financial security today: compare, choose, and buy a regular premium term insurance plan that best suits your needs. Your family’s future deserves nothing less.

FAQs about the Regular Premium Term Plan

What is the regular premium term insurance?

A regular premium term refers to a type of term insurance plan in which the policyholder pays a premium at a regular time interval, such as yearly, half-yearly, quarterly, or monthly.

What is the difference between a single premium and a regular premium?

In a single premium system, the policyholder pays a lump sum at the beginning of the policy, while in the regular premium system, the policyholder pays small amounts of money at regular intervals.

Why is regular pay better for term life insurance premiums?

Regular pay is better for term life insurance premiums as it is easy on the policyholder’s pocket and doesn’t become a financial burden on the person.

Does the premium amount remain the same throughout a regular premium term insurance plan?

Yes, the premiums remain constant throughout the policy term as long as there are no changes involving the insured.

What types of death are covered under a regular premium term insurance plan?

Deaths caused by accidents, illnesses, or natural causes are covered under the terms of the policy.

What happens if I no longer require the cover after purchasing a regular premium term insurance plan?

Insurance companies offer a free look period of 30 days from the date you receive the policy documents. During this time, you can review the terms and conditions and make changes or cancel the policy if needed.

What is the difference between regular premium and limited premium term insurance?

Regular premium means paying the premium amount at regular time intervals, while in limited premium, the policyholder pays the premiums for a shorter and specific period.

What are single premium and regular premium term insurance?

A single premium refers to paying the entire premium amount at once at the beginning of the policy term, whereas a regular premium requires the policyholder to pay premiums at regular intervals.

Can you switch between a limited premium and regular premium term insurance?

No, you cannot switch directly between a limited premium and regular premium term insurance mid-way through the policy term. Therefore, you need to buy a new policy if you want to continue a new policy.

Will my term insurance cover hospital bills too?

No, it won't. Term insurance only gives a payout if the insured person dies. For hospital bills, you need health insurance. It's best to have both for complete protection.