Limited Premium Plan is a participating non-linked plan which offers a combination of protection and savings.

What is Term Plan Insurance?

Limited term insurance plans give you the benefit of paying insurance premiums for a limited period, making sure at the same time that your coverage is extended for a longer period.

It gives you the advantage of limited premiums and continuous cover. For example, if you buy limited term insurance for 25 years, with the payable premium of only 10 years, then you will have to pay the premium for 10 years while the cover for your premiums will extend up to 25 years. 

The plan is beneficial for people who are looking for an investment instrument that offers both financial security and handsome savings.

Benefits of Limited Premium Plan

Benefits of Limited Premium Plan
  • Premiums ending in a short period: This happens to be the primary benefit of a limited pay term insurance — the fact that you do not have to pay your premiums for years on end. The plan will run longer than the tenure you pay premiums for and will continue to provide coverage throughout. This plan is a great option for those who are looking forward to spending their retirement years without much stress and hassle — not focusing on earning consistently so that they can pay their premiums.
  • Reduces relapse chances: Another great benefit of having a limited pay in term insurance is the fact that your chances of a policy relapse are reduced since you won’t have to always remember to pay your insurance premiums. Since the premiums for your policy are paid much earlier, the chances of relapse reduces, manifold. You will not have to worry about missing out on the deadlines of your premium policy.
  • Tax benefits: Another great benefit of opting for a term insurance plan with limited pay is the fact that you can claim tax benefits under Section 80C of the Income Tax Act. Since limited plans tend to have a higher premium than regular term insurance plans, you tend to get a maximum deduction. This clause lets you claim a deduction of up to Rs 1.5 lakh from your taxable income — a welcome option. With maximum deductions, you get to make the most out of your tax benefits.

Who should buy a limited premium plan?

This is a plan best suited for individuals with flexible income patterns. People who witness a sharp rise in their incomes can easily opt for limited pay term as it assures them of paying the premiums without a miss. On the other hand, it is also suitable for the ones who are unsure about their ability to pay the premium for the full term of the policy.

Such individuals require the life cover to continue for a longer time, but may not have surplus income to pay the premium in the later years. Such plans are extremely beneficial for people who are self-employed, do not have fixed salaries, are at the prime of their careers, nearing retirement or those who do not want to indulge in long term commitments of paying insurance premiums.

Life insurance solutions are need based. Each and every plan is customized and suits a specific financial need of a person. Therefore, while there are several advantages of a policy there is no clear disadvantage in case the policy has been purchased post evaluating the financial needs and goals of a person and his/her family.

Features of Limited Premium Plan

  • This is a traditional premium plan that boosts savings and offers financial security
  • It is a Limited Premium plan.
  • The plan offers flexibility to choose policy term.
  • On survival till the end of the policy term, the policyholder is eligible for maturity benefit
  • In event of the death of the life assured, the death benefit is paid to the nominee
  • The plan offers additional coverage by paying an additional premium of rider sum assured
  • The plan is a participating plan so the policyholders are entitled to simple re-visionary bonus and final additional bonus if any.