When you purchase a life insurance policy, you will need to pay premiums to the insurance provider in exchange for the life cover provided to you. At the time of purchasing your policy, you will be required to select the premium payment mode, i.e. the frequency of your premium payments.
Policy buyers can, thus, choose the annual premium payment mode, bi-annual premium payment mode, quarterly premium payment mode, monthly premium payment mode, limited premium payment mode, or single premium payment mode. The premium payment modes offered to a policy buyer, however, will vary based on the policy terms and conditions.
If you choose the annual, bi-annual, quarterly, or monthly premium payment mode, you will need to pay the premium throughout the policy tenure. In the case of limited premium payment policies, the policy buyer only has to pay the due premiums for a certain number of policy years. On the other hand, if you opt for a single premium life insurance policy, you will only have to pay the premium once before the commencement of the risk cover. Read on to know more about whether you should purchase a single premium life insurance (SPLI) policy and the factors that you should keep in mind when purchasing a SPLI policy.
Single premium life insurance policies are ideal for individuals who are looking to invest a lump sum in a financial avenue. A single premium life insurance policy will help you invest your money, provide you with a comprehensive life insurance cover, and will, in turn, ensure that your money is not wasted on unnecessary expenses.
Also, individuals with irregular and unstable incomes can invest in single premium life insurance policies when they have the required funds to purchase the policy. This will ensure that the concerned individuals will always have a life cover available, regardless of their financial situation during the policy tenure.
The primary benefit of a single premium policy is that you can purchase the policy when you have the required finances and not worry about making premium payments and keeping the policy active during the policy tenure. However, given that you are paying the premium as a lump sum to the insurance company, it is all the more necessary to do your due research and make an informed choice.
Thus, before you invest in a single premium life insurance policy, make sure to assess your financial requirements, savings and investments, and premium payment ability, among other things. If you are sure that you want to purchase a single premium life insurance policy, you should, ideally, compare a few policies that offer similar benefits and check their prices. Post this, you can invest in a single premium life insurance plan that most appeals to you.
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