What is Single Premium Term Insurance & How it Works?

What is Single Premium Term Insurance?

When Should You Opt for Single Premium Term Insurance?

Benefits of Single Premium Term Insurance

Tax Implications of Single Premium Term Insurance

FAQs about Single Premium Term Insurance

What is the Difference in Tax Benefits Between the Single Premium and Regular Premium Policies?

In a single premium payment plan, the policyholder can avail of tax benefits only for a particular year. In contrast, for the regular payment plan, they can avail of tax benefits for all the years when the premium is paid.

What if You Start Smoking After Buying a Term Insurance Policy?

In this case, it's best to inform your insurance provider and let them decide. They might increase the premium in some cases and charge the difference, or they might suggest buying a rider that covers the increased risk with an increased premium. In a few other cases, they might not charge the increased premium, depending on the case-to-case basis. 

Can I Surrender a Single Premium Term Insurance Policy?

Yes, you can surrender a single premium term insurance policy provided that its been in force for at least two years and the applicable premiums are duly paid.  

Does Term Insurance Have a Cash Surrender Value?

Term Insurance with a savings component, like the one with the return of premium, only has some surrender values. The pure-term plans don't have any savings component and hence no surrender value.

Is the Coverage Amount Fixed in Single Premium Term Insurance?

Yes, the coverage amount is predetermined and remains fixed throughout the policy term.

Can I Change the Policy Term or Coverage Amount After Purchasing Single Premium Term Insurance?

No, the policy term and coverage amount are generally fixed and cannot be changed after the policy is purchased.

Can I Nominate More Than One Person as a Beneficiary in Single Premium Term Insurance?

Yes, you can nominate multiple individuals, such as family members, dependents, or any other person of your choice, to receive the proceeds of the policy. However, it is important to accurately mention the names and shares of each beneficiary in the nomination form while buying the policy.

Is there a Possibility of Change in the Premium of the Plan After Buying?


In general, term plans in India are offered as level premium plans, meaning, once you purchase a term plan in India, the premium remains fixed for the duration of the policy.

However, it's important to note that some term plans may include provisions for premium revision based on certain factors like Riders, change in smoking habits etc.  Additionally, some policies may have provisions for premium revisions at specific intervals, such as every 5 or 10 years.