Single Premium Term Insurance Plan in India
Regarding life insurance, individuals often seek a solution that provides comprehensive coverage with minimal hassle. Unlike traditional term insurance plans requiring regular premium payments, single premium term insurance allows policyholders to make a one-time lump sum payment at the beginning of the term.
Let us read more about a Single Premium Term Insurance Plan and how this plan can secure your family's future.
Table of Contents
Overview of Single Premium Term Insurance
A Single Decision for a Lifetime of Peace

A Single Decision for a Lifetime of Peace
At 35, Sidharth Kumar, a meticulous software engineer and devoted family man, had one non-negotiable goal: Securing his wife Meena and their two children against life’s unpredictability.
After thoughtful research and heartfelt conversations with financial advisors, Sidharth chose a path that matched his foresight—a single premium term insurance policy.
He made a conscious move and locked in a ₹1 crore cover for 20 years with a one-time premium payment of ₹4,00,000.
- No recurring payments
- No annual reminders
- No risk of policy lapse due to a missed deadline.
Had he gone with the regular annual premium of ₹25,000, he would’ve spent ₹5,00,000 over 20 years. That’s ₹1,00,000 more and potentially a lot more stress.
Beyond the savings, this lump sum investment offered something invaluable: uninterrupted protection and complete peace of mind.
Plus, the premium qualified for tax benefits under Section 80C, a bonus on a decision already rich in financial wisdom.
Benefits of Single Premium Term Insurance
Here are the significant benefits of Single Premium Term Insurance:
Avoid Policy Lapse
Insurance policies are valid for a long tenure and require regular premium payments on time. A single missed premium payment, be it in any year of the tenure, can result in your policy lapse, irrespective of how many years you have already paid the premium. With single-payment term insurance, you don't need to worry about missing deadlines and can lead a stress-free life.
Higher Flexibility
Enjoy increased flexibility with single premium term insurance compared to traditional policies. Within the terms and conditions of the insurer's product, you can tailor the term length, coverage amount, and additional features to fit your specific needs.
Tax Advantages
Premium payment qualifies for the tax deduction of up to Rs 1.5 lakh per year under section 80C of the Income Tax Act, 1961, and the death benefit is exempt from tax under section 10(10D)*. However, tax benefits are applicable for a premium amount equal to or less than 10% of the sum assured.
Death Benefit
If the life assured passes within the policy term, the policyholder's family will receive a lump sum death benefit.
Cost-Effectiveness
Since the premium is payable once, the amount is lower than the total premiums paid in regular term insurance plans. Consequently, it becomes more affordable due to the reduced financial burden.
Peace of Mind
By making a lump sum premium payment, the policyholder can ensure that their family is safeguarded from financial hardships in the event of an unfortunate circumstance.
Making Use of a Windfall Gain
When one needs to make a lump sum payment for single premium term insurance, it is ideal for individuals who want to make the most of a substantial profit from a business.
When to Choose Single Premium Term Insurance?
Single Premium Term Insurance Plans come with their own set of benefits. However, these benefits might apply to one person and not to others. You can assess your situation and requirements and accordingly plan to buy a term plan variant.
Here are a few scenarios where opting for single premium term insurance can be advantageous:
You are in a Profession with Irregular Earnings
You are in a Profession with Irregular Earnings
When you are in a volatile profession with irregular earning, a single premium term insurance is more beneficial since you need not commit to regular premium payments.
You can buy the plan whenever you have a surplus for investment, thus ensuring that your life is adequately covered even during phases of low earnings.
Certain professions, such as freelancers, artists, or entrepreneurs, often experience fluctuations in income.
Read More
You are in a Hectic Schedule
You are in a Hectic Schedule
Regular payment term insurance requires disciplined premium payments, regularly and over a good number of years. If you are busy, you might forget to pay the premium on time, which may pose a risk of policy lapse.
In such a case, you might prefer paying the full premium in one go and then forget about the tension of monitoring and ensuring premium payments on time.
You Have Some Lump Sum Amount in Hand
You Have Some Lump Sum Amount in Hand
Single Premium Term Insurance allows you to invest a lump sum amount upfront, which covers the premium for the entire policy term. This eliminates the need for ongoing premium payments, providing peace of mind and financial stability. The lump sum payment ensures that your policy remains active without the risk of lapse due to missed payments.
Additionally, the proceeds from the policy can be used to cover financial obligations, support dependents, or serve as a legacy, ensuring that your beneficiaries receive a guaranteed payout in the event of your death during the policy term.
You Have Received Maturity Proceeds from the Insurance
You Have Received Maturity Proceeds from the Insurance
Your life insurance policy just matured and you received the maturity proceeds. However, you want to continue the life coverage without investing any fresh amount.
In such a case, consider investing the maturity proceeds in a Single Premium Term Insurance.
Annual Premium Payment vs Single Premium Payment
Let's compare annual and single premium payments in term insurance to explore their advantages and disadvantages.
99.53% Claim Settlement Ratio For Digit’s Life Insurance - FY'25

99.53% Claim Settlement Ratio For Digit’s Life Insurance - FY'25
When life takes an unexpected turn, every second matters. With a 99.53% Claim Settlement Ratio (CSR), Digit Life Insurance stands as a pillar of trust and reliability. This isn’t just a statistic; it’s a promise to our policyholders.
Every claim tells a story. Whether it was a salaried parent overcoming loss, a child’s future hanging in the balance, or a spouse seeking stability, we acted fast to bring peace of mind to grieving families.
That’s why we are committed to settling genuine claims swiftly, transparently, and with compassion, ensuring that your loved ones receive the support they need when it matters most.
₹2.88 Billion Worth Claims Paid in FY'25

₹2.88 Billion Worth Claims Paid in FY'25
At Digit, we don’t just talk about protecting families; we actually do it. In the last financial year, we paid ₹2.88 billion to families who lost a loved one. That’s a big jump from ₹351.52 million a few years ago, showing how much we have grown and how seriously we take our promise.
Every payout represents a family supported, a future safeguarded, and a promise fulfilled. We make sure claims are settled quickly and clearly, with zero confusion, so families don’t have to worry during tough times.
15,000+ Claims Settled in FY'25

15,000+ Claims Settled in FY'25
Solvency Ratio for Digit's Life Insurance in FY'25 is 3.85

Solvency Ratio for Digit's Life Insurance in FY'25 is 3.85
At Digit, being financially strong isn’t just a goal; it’s how we earn your trust. Our solvency ratio has grown from 2.07 to 3.85, which means we are more than ready to keep every promise we make.
This number shows we have more than enough funds to pay claims and support families, even in tough times. In fact, our ratio is nearly double the required limit, giving you extra peace of mind.
Because when you choose life insurance, you are not just buying protection; you are trusting us with your family’s future. And we take that seriously.
FAQs about Single Premium Term Insurance
What is the difference in tax benefits between the single premium and regular premium policies?
What if you start smoking after buying a term insurance policy?
Can I surrender a single premium term insurance policy?
Does term insurance have a cash surrender value?
Is the coverage amount fixed for single premium term insurance?
Can I change the policy term or coverage amount after purchasing single premium term insurance?
Can I nominate more than one person as a beneficiary in single premium term insurance?
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, which means 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, such as Riders, changes in smoking habits, etc. Additionally, some policies may have provisions for premium revisions at specific intervals, such as every 5 or 10 years.
Is insurance premium above 5 lakhs taxable?
Can a single premium term plan help with tax rebates?
What is single premium term insurance?
Can we pay term insurance with a one-time payment?
Is a single premium term insurance tax-free?
What is the surrender value of a single premium policy?
Is it good to pay single premium term insurance?
What is the advantage of a single premium policy?
What is the disadvantage of a single premium policy?
What is the difference between single premium and annual premium?
What is single premium vs flexible premium?
Is a single premium eligible for 80C?
Yes, single premium life insurance policies are eligible for tax deductions under Section 80C of the Income Tax Act, subject to certain conditions:
- Premium should not exceed 10% of the sum assured.
- The policy should not be surrendered within 2 years.
- Overall deduction under 80C cannot exceed Rs. 1.5 lakhs.
Who can avail of single premium term insurance plans?
What types of deaths are covered under a single premium term insurance plan?
How can one cancel the single premium term insurance policy?
Is it possible to first choose a single premium payment and then opt for regular premium pay?
Is the single premium payment option only applicable to term plans?
What is the difference between Single Pay, Regular Pay and Limited Pay?
For Single Pay, you make a single lump sum premium payment at the start of the policy period for your term plan. Conversely, Limited Pay allows you to pay premiums for a fixed and limited number of years shorter than the policy term. Besides, in Regular Pay, the premium payment term matches your chosen policy term.
Read More: Limited Pay vs Regular Pay in Term Insurance
Does a single premium term insurance plan have cash value if it is surrendered?
Can I skip health insurance if I buy single premium term insurance?
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