Term Life Insurance: Quick Buying Guide

[starstruck]

Probably a stupid question but what in your opinion is a better way of premium payment for the entire policy term: monthly or annually?

Monthly. You can then use Amazon Pay balance.

 

[Mjindal]

Hi,
I recently purchased Term insurance and did a bit of analysis before deciding regular or limited, what to opt. Below is the summary of the analysis with the help of an example.
To determine which premium payment option provides better long-term value — Limited Premium (10 years) or Regular Premium (till age 65) — by applying the SIPSWP-ROI Framework.

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🔍 Scenario Assumptions​

• Age: 35
• Coverage: Till age 65 (30 years)
• Limited Premium: ₹70,000/year for 10 years
• Regular Premium: ₹35,000/year for 30 years
• Annual income: > ₹30 lakhs (New Tax Regime)
• Investment Option: ₹35,000/year saved (in regular premium mode) invested via SIP (₹3,000/month) @ 8% annual return for 10 years, followed by SWP of ₹3,000/month for 20 years.

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📊 Key Financial Insights (SIPSWP-ROI Framework)​

Factor	Limited Premium	Regular Premium + SIP
Total Premium Outgo	₹7,00,000 (₹70k × 10 yrs)	₹10,50,000 (₹35k × 30 yrs)
Extra Invested (via SIP)	N/A	₹3,000/month for 10 yrs = ₹3.6 lakh
Corpus After 10 yrs	N/A	₹5.4 lakh (SIP at 8%)
Withdrawals via SWP	N/A	₹3k/month for 20 yrs = ₹7.2 lakh
Final Corpus Left	N/A	₹8.12 lakh (post-SWP)

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✅ Conclusion​

While the limited premium option appears cheaper in terms of total payout, the regular premium + SIP strategy:

• Builds wealth through disciplined investing of saved premium
• Funds itself through SWP after 10 years
• Leaves behind a surplus corpus even after 20 years of withdrawals

💡 Hence, for financially disciplined individuals under the new tax regime, the Regular Premium + SIP model is more beneficial in both coverage and wealth creation.

Have taken premiums for both regular and limited period from policy bazaar, and did SIP and SWP calculations from grow.in calculators, please let know in case of any mistakes.