A term insurance with a limited premium payment plan is a smart choice for individuals looking to balance affordability with long-term coverage. It allows policyholders to pay off the premium within a shorter duration while still enjoying full coverage for the entire policy term.
In such a term plan, while the policyholder pays the premiums for a shorter duration — 5 to 15 years — the coverage remains active till the age of 60 years. While the yearly premium for such plans is higher than that of regular plans, the total premium outgo over the years is lower as compared with a regular term plan.
It is also an ideal option for those whose earning potential is highest during specific years, such as early to mid-career. Rishabh Garg, head, term insurance, Policybazaar.com, says this helps individuals who want to secure their family’s future without committing to lifelong premiums. If an individual has a clear financial goal, such as a child’s education or retirement planning, a limited payment term can align with his specific needs. “By paying off premiums early on, they can focus on other financial goals like retirement,” he says.
