Sawhney, most of us know that a premium is the price paid for buying an insurance policy but several premium-related aspects are less well understood.
Increasing and decreasing premium A term plan with increasing premiums (as explained above) is a typical example of increasing premiums.
Tax benefit available only for premium paid for specified persons Under Section 80C of the Income Tax Act, any amount paid by what is a monetary gift a policyholder towards life insurance premium for self, spouse or his/her children can be claimed as deduction from taxable income.Did you know tax benefit is available only on premium paid for life insurance policies in your name or in the name of specified relatives?If a person is paying premium for more than one insurance policy, all the premiums can be included.In advance, premium is required to be paid in advance and can be paid via cash up to Rs 50,000, (the limit set by irda for cash payments) cheque.An insurance premium is generally expressed dooneyandbourke com coupon code as premium per thousand rupees mi apa rewards of sum assured and is illustrated in the form of tables of premium rates by insurance companies.It is administratively difficult for the insurance company to keep track of, levy and collect varying premiums.
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The advantages of level premium are: - As mortality risk increases with the age of the insured the actual premium chargeable at higher age is much more than that chargeable when a person is young.This is because the cost of servicing of all policies of the same type being almost the same, a higher SA means lower servicing cost per unit.Rebate for sum assured.During this period, he can pay the premium without any extra charge and the policy will still continue to be in force.When a policy has lapsed, it can be revived and brought to its full force by payment of overdue premiums (with interest) and a declaration about state of health or fresh medical examination.Rebate for periodicity of premium, in case of periodic premium payment policies one can normally choose to pay premium annually, half yearly, quarterly or monthly depending on ones cash flow situation.However, a lapsed policy can be revived only if the insurer agrees to.This is advantageous for both the life assured and the insurance company and therefore most life insurance plans except some term insurance plans involve level premium payment.