Single Premium or Yearly premium mode ? for premium payment of LIC’s Term insurance

POSTED BY VinManHBK007 ON November 10, 2013 8:42 am COMMENTS (8)

Hello Experts & Financial Planners & Gurus

I want to go for Term insurance and have decided to go for LIC’s Amulya Jeevan (Product # 190) for Sum Assured of 60,00,000 INR.

Is it advisable to go for Single premium (which i can afford at this juncture of time and be done with it …with peace of mind) or stick to conservative annual premium ?

In either case what would be the tax implication for me being an NRI.

Please advise.

Regards

Vinay

8 replies on this article “Single Premium or Yearly premium mode ? for premium payment of LIC’s Term insurance”

  1. ashalanshu says:

    Dear Vinay, please contact LIC directly and demand clarification. Do not believe what your Agent is telling.

    Thanks

    Ashal

  2. ashalanshu says:

    Dear Vinay, as you are NRI, not many insurer ‘ll provide you a Term Cover. I dount that your LIC agent has disclosed your residency status clearly to LIC. Please check on it.

    thanks

    Ashal

    1. Vinay Maithani says:

      OK Ashal I will ask the LIC agent. Since i had posted the same question to him during our email interaction the response was like this “If you are visiting India, the medicals and special reports can be done in India. However , there is a provision of medical examination and special report been done in the prescribed format at place of your residence at abroad.” I have posed the same question again and let us what the response is.

  3. Vinay Maithani says:

    Thank you Vimal for the elaborate hands on reply. I really appreciate your help in this regard. FD is what i also went through my mind and i will do it the way you suggested.

    However which other companies can you suggest to go for term insurance other than LIC ? For Accident, I am thinking of going for Accident policy from National Insurance for the entire family.

    Please advise.

  4. Vimalraj Nagendran says:

    Hi Vinay,

    I have faced same dilema just some months back when I was getting one for me. Eventually I decided to put the amount of “single premium” into an fixed deposit with auto-renew option. Most likely you may end of generating the interest rate from your FD which will almost equal to your yearly premium.

    And as long as I have excess money after allocating to all my goals every year I will pay the yearly premium from salary and let the FD grow compounded. When an year comes where I cannot afford yearly premium just by my salary I can now start doing withdrawal from the fixed deposit for payments.

    I’m sure you might have looked at other insurance companies as well, I just feel LIC is way too expensive for their term insurance (almost double compared to others), I recommend you look for a plan that also has riders especially accidental rider.

    Regards
    Vimal

    1. Vinay Maithani says:

      Thank you Vimal for the elaborate hands on reply. I really appreciate your help in this regard. FD is what i also went through my mind and i will do it the way you suggested.
      However which other companies can you suggest to go for term insurance other than LIC ? For Accident, I am thinking of going for Accident policy from National Insurance for the entire family.
      Please advise.

      1. Vimalraj Nagendran says:

        Hi Vinay,

        You are most welcome. There are many to name a few, ICICIPruLife (iCare), HDFCLife (Click2Protect), SBILife, Ageon Religare etc..etc.. all of them are available as online term insurance so you dont have to visit any branch or agent. Most importantly as my virtual guru (Manish) recommends/insists fill out the insurance forms in its entirety yourself personally and truthfully.

        You can compare them and pick one (or better two, you can split your desired sum assured into two). Example: If you were thinking of 1Crore, you can have two insurances with company A & B each covering 50Lakhs.

        Regards
        Vimal

  5. battula says:

    Vinay,

    You need to decide how much you can save by paying the whole amount at once when compared with yearly plan.
    By sticking to yearly plan, you can invst your remaining amount to get better returns.
    I personally prefer yearly plan.

    If you feel that you can’t save much and no guarantee of returns ,then you can go for one time payment.

    Regards,
    Battula.

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