What is the Key Difference between Limited and Regular Pay Insurance Plan
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

What is the Difference Between Limited and Regular Pay Insurance Plan?

What is the Difference Between Limited and Regular Pay Insurance Plan?
  • 11th Mar 2021 |
  • 1,738

Life insurance policies offer several unique features to make the plan more convenient for you. One such feature is the mode of premium payment. Typically, there are two types of premium modes – regular and limited. Each has its advantages and disadvantages, and the ultimate choice between the two premium modes depends on your financial situation, life stage, and monetary goals.

Here is everything you should about limited and regular pay insurance plan and their differences:

What are the limited pay insurance plans?

These insurance policies allow you to pay premiums only for a specific pre-agreed period, post which you are not liable to pay anything. However, the policy continues for the full term, irrespective of the premium duration. In such insurance policies, the premium payment term is less than the policy tenure.

For example; X buys a limited pay insurance policy at the age of 40 for 20 years. He expects to pay all premiums in his working years and wishes to retire (at 55 years) without any financial burden. He opts to pay premiums only until the age of 50. But he will get an insurance cover up till the age of 60.

What are regular pay insurance plans?

A regular pay insurance plan is an insurance policy where the premium payment term and policy tenure are the same. You pay premiums for the entire policy duration and enjoy protection for the whole insurance term.

For example; Y is 40 years old and owns a small business and can manage regular premium payments. He takes a regular pay insurance plan for 20 years and pays premiums throughout the term (60 years) while enjoying insurance protection until 60 years.

What is the difference between limited and regular pay insurance?

Limited Pay Regular Pay
Shorter premium payment period Longer premium payment period
Full coverage for the entire policy period irrespective of limited premium tenure. Full coverage for the entire policy period, subject to regular and timely premium payments.
Low chances of policy lapse due to the short payment period Higher chances of policy lapse due to a longer payment period.
Financial burden is distributed in a shorter time period. Financial burden is distributed across a larger span of time.
More financially burdening since premium out-flow is concentrated. Less financially burdening since premium out-flow is spread.
No risk of premiums rising since premiums are paid out in a specific time. Risk of premiums rising with age.
Potential rewards and discounts offered because of the advance premium payment No potential discounts or rewards.
Premiums are paid off before retirement or a specific milestone. Premiums continue till the end of the policy term.
Maximum tax benefits can be reaped in the limited payment schedule under Section 80C. Tax benefits are spread across the entire life insurance policy period.

How to choose between the two?

The ultimate choice between a limited and regular pay insurance plan depends on your financial situation, existing liabilities, future plans, retirement age, etc. However, a limited pay option is more suitable for short career span people like sportspersons, etc., or those who work on commissions, bonuses, or under uncertain work conditions like army personnel. Moreover, those that are closer to retirement can also consider a limited insurance plan. Alternatively, people with fixed income sources, limited budgets, or those far from retirement, can opt for a regular premium payment option.

In addition to selecting the right premium payment mode, be sure to choose the right insurer first. Check different life insurance plans plans offered by Kotak Lifewith flexible premium options, economical premiums and competitive features, and make a smart choice.

Kotak e-Term Plan

Download Brochure

Features

  • Nominal Cost
  • Multiple Plan Options
  • Flexible Payout Options
  • Critical Illness Rider
  • Tax Savings
  • Long term Coverage

Ref. No. KLI/22-23/E-BB/492

T&C

Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Life Insurance for Millennials

How to Choose the Right Life Insurance Policy for Your Age?

Are Deaths Due To Coronavirus Covered by Kotak E-Term Plan?

Top 5 Common Life Insurance Myths and Facts

Why is Medical Test Important While Buying a Term Insurance?

Unit-Linked Life Insurance (ULIPs) vs. Term Insurance

Is it Possible to Make Changes in a Term Plan’s Specification Post Purchase?

What Should One Expect During the Medical Evaluation for Life Insurance?

All about Your Rights and Duties While Buying Life Insurance Policy

All About Life Insurance and How It Works?

How to Customize Your Life Insurance Policy with Riders

Life Insurance with Money Back vs Without Money Back

Life Insurance for Overweight Applicants

Is Return-of-Premium (ROP) in Life Insurance Worth It?

Why Buying a Term Insurance is Important for all Parents

What is the Current Trend in Term Insurance?

NRI Premium Payment Options

How Many Insurances Should I Have?

How to Select a Perfect Life Insurance Policy in India to Protect Your Future?

5 Things to Keep in Mind While Buying Life Insurance Policy

Compare Different Life Insurance Products Offered By Kotak Life

4 Benefits of Gifting Life Insurance Cover to Your Spouse

Why Term Insurance for Women is Important?

A Term Insurance Guide for Disabled People

Nominee in insurance - A Complete Guide on nomination in insurance

Can You Apply For A Life Insurance After Getting Heart Attack? Here is Everything You Need To Know

Term Insurance Tips for NRIs in India

Why Your Family Should Know About Your Life Insurance Policy?

Does Life Insurance Pay for Suicidal Death?

6 Different Types of Insurance Policies

Types of Insurance You Must Invest in for Secure Future

Is It Advisable To Have Multiple Life Insurance Policies?

Guide for Buying Online Term Insurance Plans for Senior Citizens

What Is Insurance Coverage?

Process of Filing A Claim For Life Insurance

Details Required To Be Filled In A Life Insurance Form

10 Most Frequently Asked Questions - FAQs on Term Insurance

“Life” Insurance or “Death” Insurance?

Life Insurance Vs. Mutual Funds Investment

Why Life Insurance Is Always a Smart Decision

Why Do Life Insurance Agents Avoid Selling Term Plans?

5 Things to Consider Before You Buy Life Insurance

What is Group Insurance?

Important Features of a Term Insurance Plan

How to Buy a Life Insurance Plan?

What is Minimum Life Insurance Policy?

What is Sum Assured in Endowment Policy?

What Should One Consider Buying: Term Insurance or Traditional Life Insurance

Important Factors to Consider While Choosing the Right Term Period for Your Term Insurance Plan

Does Life Insurance Policy Cover Covid Death?

Difference Between Insurance and Assurance?

Important Terminologies of Life Insurance

Term Insurance Vs Life insurance: Small Details, Big Differences

Sabse Pehle Life Insurance

Should you buy a Renewable Term Life Policy?

Is It Time to Review Life Insurance Policy of Yours?

What Is the Procedure to choose a nomination in life insurance policy?

Does Life Insurance Cover Terminal Illness?

How Does Life Insurance Work?

How Much Life Insurance Costs and How Much Insurance Cover You Need?

Most Common Life Insurance Riders to Enhance Your Existing Policy

Why Online Term Insurance Plans Cheap?

What Is Insurance Rider and It’s Benefits?

Why do I Need Life Insurance?

How Do Term Insurance Plans Differ for Smokers?

Benefits of Term Insurance with Critical Illness Rider

What Is Surrender Value (Cash Surrender Value) in Insurance and how is it calculated?

How Much Life Insurance Cover Do I Need?

Savings cum Protection Plans Secures Your Family from Unforeseen Events

Life Insurance Beneficiary

Different Kind of Deaths that are Not Covered in a Term Insurance Plan

Do Your Financial Planning with Life Insurance!

Difference Between ULIP and Endowment Plan?

5 Reasons Why a Women Should Buy a Life Insurance

Life Insurance for Overweight Applicants

Term Life Insurance Vs Money Back Life Insurance

What is an Endowment Plan?

Is it Possible to Reduce Life Insurance Premium without Affecting Sum Assured?

Term Insurance for Home Loan: How Term Plan Helps in Paying Off Home Loan?

When are Millennials required to take out a life insurance policy?

Benefits of Buying Term Insurance Plan for Senior Citizens in India

How to Find the Best Term Insurance Plan in Seven Steps

Is Voluntary Life Insurance the Same as Basic Life Insurance?

How to Choose Life Insurance for All Ages?

Life Insurance and Retirement Planning

Life Insurance Plans for Women

Who Is A Nominee In A Life Insurance Plan?

Reasons Why Term Insurance Claims Get Rejected

Why do most Indians choose the wrong way to buy life insurance?

Can An Individual Buy Multiple Term Insurance Plans?

Why You Should Never Cancel Life Insurance Policy

5 Advantages of Life Insurance Going Digital

Comparing low premium term insurance Is Not the Only Factor While Buying Life Insurance

All about Life Insurance Calculators

Health Insurance VS Life Insurance

Digital Life Certificate for Pensioners Seeking Pension

भारत में जीवन बीमा पॉलिसियों के प्रकार

Is it Worth Buying Disability Rider on Term Insurance?

Can a Term Plan be the Substitute for a Retirement Plan?

Various Term Insurance Premium Payment Options Available in India

How Much Life Insurance Do You Need?

Voluntary Life Insurance Policy Vs Group Life Insurance

When Should You Review Term Life Insurance of Yours?

Everything You Must Know About ULIP Riders

FAQs on Life Insurance

Term Life Insurance vs. Accidental Death Insurance

Choosing Between Short-Term & Long-Term Insurance Plans

Staying Insured While Investing

How Often You Must Review Your Life Insurance Policy?

Difference Between Money Back and Endowment Policy

Choose the Nominee of a Term Life Insurance Plan Wisely

What are the Benefits of Endowment Policy?

How to Make Death Claims on Life Insurance?

Role of IRDAI in the Insurance Sector

Types of Life Insurance Policies in India

Why You Should Buy Term Insurance under the MWP Act (Married Women’s Property Act)?

What is Underinsurance & The Dangers of Being Underinsured

ULIPs: Suitable for all

6 Things You May Not Know about Life Insurance

Insurance Vs Investment - A Guide to Your Financial Goals

Why Renewal of Term Insurance Plan is Important

Do Life Insurance Premiums Increase Every Year?

What Is The Life Insurance Penetration In India And How Does It Compare Globally?

Term Insurance Vs Car Insurance: A Budgetary Choice You'll Regret

5 Smart Steps to keep in mind while buying term policies

What is a Single Premium Term Plan and its Tax Benefit?

Life Insurance Policy Closure

Choosing the Right Life Insurance

Insurance Changes You Need to Make Post Marriage

What Is Financial Planning?

Key Things to Review in Your Life Insurance Policy Document

What Is Social Impact Investing and How Does It Benefit Society?

5 Common Life Insurance FAQs and Answers

Is Life Insurance For Millennials Really Needed?

All About Backdating in Life Insurance

What are robo-advisors in insurance?

All about IRDAI

Term Insurance Claim Process

Is Life Insurance an Investment?

Life Insurance and Millennials

How to Buy a Term Life Insurance Online

What Is Staggered Payment Option Under Term Insurance Policy?

Adding A Child to Your Life Insurance Policy?

9 Most Important Things You Must Learn About Paying Life Insurance Premium

Does Family History Affects your Term Life Insurance Rates?

A Step-by-Step Guide: How To Make An Investment Plan?

Can NRI Buy Life Insurance in India?

Can You Transfer Life Insurance Policies to Another Company in India?

5 Easy Steps to Buying A Policy

Beware of Phishing & Fraud Insurance Calls

Why One Must Buy Term Insurance before 25 Years

How to Calculate Human Life Value(HLV)?

Best Insurance Plans in India

Customer Awareness on Information Security

What Is a Whole Life Insurance Plan?

Kotak Life Claim Settlement Ratio

All You Need to Know About Life Insurance - Its Benefits, Features, and Types of Life Insurance

Difference Between Term Insurance and Endowment Plan

Terms and Conditions of Term Insurance Plans

First Job? Here’s Some Tips on How to Manage Finances

1 CR Term Insurance Plan: How to Pick the Best 1 CR Term Plan

Different Types Of Life Insurance In India

Think About Life Insurance Sooner than Later

5 Ways to ensure faster settlement of claims

What Is Investment Insurance?

5 Reasons Why You Need Life Insurance in College

Types of Life Insurance Or One Investment, Many Options

Importance of Checking Claim Settlement Ratio before Buying Life Insurance

Different Types of Insurance Policies in India

7 Superficial Reasons People Avoid Buying Insurance Online

What Happens If I Stop Paying My Life Insurance Premium?

How to Choose a Life Insurance Policy

Guidelines for Linking Aadhar and PAN to Insurance Policies

What is Life Insurance?

How To Use Different Types Of Life Insurance For Retirement Planning?

Life Insurance vs Health Insurance

How to Revive the Lapsed Life Insurance Policy?

In India, should NRIs purchase life insurance?

Life Insurance vs Mutual Funds

Always keep your Nominee informed

Loan Against Life Insurance Policy

Important Life Insurance Terms You Must Know

What is a savings plan?

Choosing a Life Insurance Beneficiary

Biggest Life Insurance Myths

What is Human Life value and a Human Life Value Calculator?

Take 100% Responsibility of Your Family with Term Life Insurance