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Which is better limited pay or regular pay in term insurance?

Insurance premium payment offers a number of payment plans to choose from such as single pay, limited pay, and regular pay - all options have their own benefits.

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

Buying term insurance may often be overwhelming with options ranging from policy tenure to premium payment modes. This makes the decision to choose what is best for you and your loved ones more important than ever before.

To maintain the financial benefits of the policy, premium payments, the sum of money paid to the insurer plays a critical role. It is therefore important that you choose a payment mode that is right for you. Insurance premium payment offers a number of payment plans to choose from such as single pay, limited pay, and regular pay - all options have their own benefits.

Single Pay

You can pay the entire insurance premium payment amount in one go with this option. Furthermore, the tenure of the insurance coverage will be valid for the entire duration you choose. As a result, you won’t have to worry about organising funds for each due date or about your policy expiring due to non-payment.

Limited Pay

In limited premium pay, you can choose a set period where you make recurring payments. This time period is usually shorter and ends before the duration of the policy. For example, if you are 30 years old and decide to buy term insurance for the next 30 years, you can choose to pay the premium only for 15 years, which means that for the remaining 15 years there will be no premium payment.

Regular Pay

In regular pay, the payments are to be made at regular intervals, monthly, quarterly, half-yearly, or annually throughout the policy tenure. Considering the above example, if you opt for regular pay, periodic payments will continue for the entire tenure, that is 30 years.

Term Insurance Limited Pay Vs Regular Pay


Regular Pay Term Insurance

Limited Pay Term Insurance

Payment Duration

Lasts throughout the policy period

Lasts for a specific period


For the entire policy term

Extended cover for the entire policy term regardless of limited payment time

Financial burden

Payments evenly spread throughout the tenure

Entire payment to be made within a shorter time span

Premium cost



Having understood the difference between the two commonly opted premium payment options, it becomes significant to choose the one suitable for your needs.

Limited pay option is suitable for individuals having short career spans, working in uncertain work environments, professionals or business owners, and those approaching retirement age. Regular pay is best for people with a fixed income source. Therefore, this mode is more viable for salaried employees. Furthermore, if you are young and need coverage until you retire, this choice may lower your total premium cost. You can also avail tax advantages under Section 80C for the entire tenure.

You should opt for a payment method only after weighing the benefits and drawbacks of term insurance limited pay vs regular pay. The decision should be based on your current financial condition and your anticipated future earnings. However, regardless of the method of payment, premium payments are critical to maintaining coverage. Keeping all the benefits in mind. Choose yours today!

Kotak e-Term

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  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**

Ref. No. KLI/22-23/E-BB/2435


- A Consumer Education Initiative series by Kotak Life