Limited Pay Term Insurance Plans for 15 Years


5 min read

Updated on Apr 26, 2023

Term insurance is one of the most important types of insurance plans that you must opt for. A term insurance plan also is affordable and a great step toward protecting your family members when you are not around anymore. If you are aware of term life insurance plans, you may have been wondering which is the best term insurance plan.

If you are planning to secure the financial future of your family, the limited pay term insurance plans for 15 years are the best option to go for. Individuals of any age range can buy this plan and it is taken based on how much coverage is required. You can find this option among many of the best term insurance plans in India in 2022-23.

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What is a Limited Payment Term Insurance Policy?

The limited payment term insurance policy refers to a payment plan, where the premium payments are made for a limited period such as 10 or 15 years, while the coverage is provided for a much longer period. This is useful for salaried persons who are looking for having term life insurance coverage till they become much older but want to pay off the premiums by retirement age such as 55 or 60 years. The coverage is not affected by the premium payment period, as the extra premiums of the term are adjusted as a slightly higher premium amount for the payment period. You can check out the best term insurance plans in 2022-23 to find the option of paying premiums for a limited time.

What is the need for a limited pay option?

If you are wondering why you need a limited pay option, then here are some reasons for you:

  • If an individual is trying to purchase a whole life cover
  • If he/she is looking for a shift in career
  • If he/she wants a break in your career in the future.

Also Read: Types of Life Insurance Policies in India

4 Advantages of limited pay option for 15 years

As the benefits of limited payment options for 15 years is concerned, here are some of them mentioned below:

1. A shorter period

For a long policy tenure as well as life coverage, you will be able to get a shorter premium payment term. If you have apt planning based on your earnings and if you are employed, you will be able to choose your time of payment. The policy tenure can be increased even during one’s retirement.

2. Plan for high-life cover

On purchasing a policy, the premium is lesser since the chances of dying at a young age are lesser. Financial responsibilities are comparatively lesser at a young age in a person’s life. Therefore, a huge amount for the term insurance plan can be contributed.

3. Decreased chance of policy lapse

Many times, it happens that an individual buys a term insurance plan without proper planning and then fails to pay the premium. However, the limited pay option helps with the short premium payment term. As a result of which the chances of policy lapse also reduces.

4. Tax benefits

When a term plan comes with limited pay, it is quite natural that the annual premium will increase. As compared to the regular pay option, for limited pay the premium rates are quite higher. With the annual premium getting higher, the tax deduction amount under Section 80C of the Income Tax Act can also be increased up to INR 1.5 lakh per annum.

How is Limited Pay different from Regular Pay?

As we compare these two, it is quite important to know their benefits. Let us pay heed to both of them,

Limited Pay Regular Pay
Paying premiums for a limited period of the policy term Paying a premium for the entire policy term
Life coverage for the entire policy term regardless of the payment period Life coverage for the entire policy term
Higher premium amounts as the number of premiums decreases Lower premium amount compared to limited pay as the number of premiums is more
Lesser number of premiums equates to lesser chances of policy lapse A higher number of premiums equate to higher chances of policy lapse
Best for saving tax as the premium is higher and can be matched to tax years Tax benefits spread over the entire policy term regardless of age and tax slab

Limited period term insurance plans are gaining popularity as they offer many practical benefits to the policyholders while giving them a few years of life coverage without the burden of paying premiums. Using a term insurance plan calculator can give the customers clarity on the total premium that they are paying and the coverage that they can receive. There are many attractive and practical payment plans available that customers can choose from when buying the best term insurance plans in India that match their needs.

Also read: 8 Lesser Known Facts About Term Insurance Plans | Need of term insurance plans for senior citizens – 5 best senior citizens term plans and their key features

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FAQs on Limited Pay Term Insurance Plans

Is limited pay good for term insurance?

Yes, it is. Limited pay helps you limit your payment period to the time in your life when you have maximum paying capacity.

Can I pay term insurance for 10 years?

Yes, you can pay term insurance for any period of time, including 10 years.

Is limited pay better than regular pay?

Yes, limited pay is better than regular pay since you get better tax benefits, and also you can align your payment period with the time when you have higher paying capacity.

What is the tenure of a limited pay life policy?

You can choose the tenure of a limited payment life policy according to your conveniences such as 10, 15, or 20 years.

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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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