Single Premium Policy

In today’s scenario, insurance has become a basic necessity after food, clothing and shelter. While some people choose to pay a regular premium, others opt for a single premium policy offered by insurers. Single premium policies are purchased because of the following reasons:

  • No contractual obligation to pay regular premium

  • Policy continues for the complete policy term with all the benefits by paying a single premium

  • If a prospect’s income does not support him/her paying regular premium, then s/he might opt for single premium.

As the name suggests, in single premium policy, one has to pay premium just once. This amount is the premium amount. The policy benefits continue for the whole term of the policy. For e.g., you have taken a single premium policy for 20 years with the premium amount of 5 Lakhs, you just pay the amount once and enjoy the maturity benefit or the death benefit for the complete term of 20 years.

You can always prefer taking the single premium policy if:

  • You have received a huge amount of money and are looking for some investment options

  • You want to increase your insurance cover and are also looking for investment component

  • You are not sure about regular income options to pay the premiums regularly

  • Your lifestyle makes it difficult to ensure regular payments on time

Single premium policy plan should be preferred depending upon the amount of lump sum available with you. You should always understand the terms and conditions and compare the rate of returns offered by various insurance companies.

But the most important feature that you should understand is that a huge investment is made by you. While choosing a company, you should always compare their claim settlement rates, i.e., how many claims have been paid by the company out of the claims made by the customers. So you should always be cautious where you invest your hard earned money.


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