Regular Premium Policy

When you buy an insurance policy, it is important to note that the premium paying frequency varies from one policy to the other. You need to decide whether you would like to pay the entire premium amount at one go as a single premium or at regular intervals for a particular period of time through regular premium payments. The former is called a single premium policy and the latter a regular premium policy. Even in the regular premium policy, you can choose the paying frequency which is usually annually, half-yearly, quarterly or monthly, depending on the plan.

    Here are some aspects you should look at before deciding whether you should go for regular premium policy.

  • Income Flow
    Regular premiums are suitable for those with a regular income and who cannot afford to block a big sum at one go. Such individuals would have the capacity to pay premiums regularly for many years ahead.

  • Affordability
    Single premium plans carry larger premium sizes than a regular premium for the same plan. In a regular premium case, the amount of each premium is much smaller thus offering the ease of payment by not being heavy on the pocket.

  • Tax Benefit
    Single premium plans are eligible for deduction under Section 80C and Section 10(10D) that makes maturity amount tax-free. However the deduction under Section 80C can be availed only once. On the other hand, you can avail tax benefit in a regular premium plan under section 80 C throughout the premium paying term. See Latest Income Tax Deductions and Exemptions


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