It is important for an individual or family to open the door to financial security. In a world full of unprecedented possibilities, no one can predict the final destination of a life. Therefore, it is essential for the breadwinners to ensure a happy future for their dependents or family by investing in term insurance.
Term Insurance is a form of life insurance product which offers financial protection to the dependent or a family at affordable rates. The term insurance provides a large or significant amount of life cover at the maturity of the policy. The premium of a term insurance plan is relatively low compared to other life insurance products. The benefit of such a plan is paid out to the nominee in case of the demise of the policyholder.
Read More: What is a Term Insurance Plan
Term insurance allows an individual or policyholder to pay the premium amount in different ways. The policyholder may choose from the options which best suit his financial situation. The options offered in term insurance include the following.
Let us discuss the definition of each pay mentioned above.
Under regular pay term insurance, the policyholder pays the premium throughout the entire term of the policy. The policyholder is obligated to make the premium payment on a monthly, quarterly or annual basis. It is expected to allocate the premium amount until the termination of the policy.
The regular pay policy is considered as flexible. The policyholder may spread the premium for an extended period. This makes the policy more affordable for the families and policyholders.
The Regular Pay Term includes many key features and benefits.
Let us discuss the features of the regular pay term.
Limited pay term insurance allows the insured to pay the premium for a specified period. The policyholder is expected to pay the premium of the entire policy term in a limited period. Upon payment of the entire premium amount, the life coverage and its benefit shall remain in force for the entire tenure of the policy.
Hence, when an individual chooses a limited pay term, he pays off the premium before the end of the policy term. It further allows the policyholder to meet other expenses upon completion of the premium amount.
The policyholder must select the right and wise premium payment option while purchasing the term insurance. One may choose among the three aforementioned options in order to pay the premium of the policy. Therefore, the policyholder must understand these options in their entirety.
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A. The policyholder must be consistent in making the payment of the premium. He is expected to allocate the premium amount throughout the policy tenure. Hence, he must not discontinue in allocating the premium amount.
On top of that, the regular premium amount is more than the limited pay. Hence, the policyholder must consider this factor before stepping into the plan.
A. Let us draw the differences between Regular Pay and Limited Pay.
A. The primary benefit that one may avail of by choosing limited pay is the emancipation from paying premiums for a long period. Unlike regular pay, limited pay allows the policyholder to pay the premium for a limited period of time. However, the coverage shall be provided for the entire tenure.
A. Single pay is a one-time payment of premium which is done by the policyholder at the beginning of the policy.
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