Term Insurance Premium Payment Options
The experience of paying the premiums of an insurance policy can be simple and hassle-free if you opt for the right payment option. As there is no standard right mode of payment, you just have to understand your income cycle and the number of years you can pay for. To help you with this, here is a guide to the insurance payment options and the various modes you can use to complete the payment.
Insurance Payments Options:
Regular Payment Option
Regular payment option enables you to secure a life insurance policy by paying the premiums on a quarterly, monthly, half-yearly and yearly basis. Such a payment mode is affordable for many salaried people as the payments can be made on a periodic basis. You are also able to track the dependency on you and could surrender your policy if your dependents are financially self-sufficient.
Limited Payment Option
The limited payment option is an alternative which allows you to pay the premiums for a limited period which is shorter in comparison to the regular payment mode. But this payment option does not affect your term plan coverage period and enables you to go for a longer-term. This is a lucrative way to pay off the premiums and suits certain people who don’t like having financial commitments. Also, if you aren’t sure about your financial status in the future or if you are nearing retirement, then limited payment enables you to end the payment obligation early.
Single Payment Option
A single payment option is where the premiums are paid at once for the entire policy term. Such a mode could be less expensive when compared to the limited payment or regular payment mode. But when you consider the inflation rate and calculate the premiums, you could also end up paying more via single payment mode when compared to others.
Methods of Premium Payment
Here are some methods that you can use to make the payment for a life insurance plan easier after choosing the above-given payment frequencies:
You can use your debit card to make the premium payment online by providing the details of your debit card. This method is convenient as you just have to provide the card number, the expiry date of the debit card and CVV for successful payment.
You can also use your credit card to make the payment only if the credit card is in your name.
Internet banking is another hassle-free option for payment as you can complete the payment within a few minutes.
Electronic Clearing Service (ECS)
If you are the type of person who forgets deadlines and would like the premium amount to be directly deducted from your account, you can opt for Electronic Clearing Service. With the help of ECS, you can be worry-free about your insurance policy.
Many are still not comfortable with setting up their internet banking account and paying online. If you are one of them, you can opt for the offline payment method and visit your insurer’s office. By dropping a cheque or demand draft or by paying cash, your premium payment will be complete.