Advantages of Limited Premium Payment Term Insurance Plans
Paying off your life insurance premiums can certainly start taking a toll on your pocket due to your future plans. The long-term payment could come in-between many of these plans leading you to adjust accordingly. But what if you could settle the premiums early-on? Yes, you definitely can with the limited premium payment option. Let’s look at the benefits of this payment mode.
What Is Limited Premium Payment Option?
Limited premium payment method allows you to secure a term plan by paying for a shorter duration giving you coverage for a longer time. You can opt for this option if you don’t like having financial commitments for an extended period. It is also a lucrative option if you think you are going to have a rise in income for a short time.
Benefits of Limited Premium Payment Method
Here are some benefits of the limited premium payment option for term insurance that you should know:
1. Short Period of Payment
With limited payment mode, you are enabled to pay the premium for your life insurance for a short duration but get to enjoy a longer policy term. It is best for people with small businesses who are not sure about the profitability of their startups or for people who are nearing their retirement age. Limited premium payment method allows them to secure term insurance even if they are unable to pay regularly due to income issues or older age.
2. Longer Coverage Period
You can choose a longer coverage period for your term plan as you will be paying the premiums for a limited time. Due to this, you can extend the policy term even beyond your retirement age as you have finished paying all your premiums. The limited payment option provides you with risk coverage for a longer time.
3. Tax Benefits
You can avail tax benefits under Section 80C of the Income Tax Act and claim the premiums paid towards a term policy for deductions. But another perk is that you are able to claim a larger amount for income tax deduction as your premiums will be higher due to the limited mode.
4. No-Risk of Policy Lapse
As the premiums will be paid off early, you do not have to worry about carrying the burden of premiums for long. The responsibility of paying for a continuous period of 30-40 years can slowly start to put a dent in your wallet. But with the perks of limited payment mode, there are lesser chances of your policy getting lapsed.
5. Best for Certain Professions
This method of payment also suits people from certain professions like a business that is flourishing at the moment but the future is obscure. Also, if you are self-employed or do not have a plan to work for a longer period of time, limited premium payment allows you to pay for a shorter duration and secure a life insurance policy.
I am Daisy Bell and a pro-level blogger with years of experience in writing for multiple industries. I have extensive knowledge of Food, Fitness, Healthcare, business, fashion, and many other popular niches. I have post graduated in arts and have a keen interest in traveling.