When it comes to any lump sum money received in the form of windfall gains, say, through inheritance, there is always the temptation to spend this money injudiciously. Single-premium insurance products often come in handy for better utilisation of this lump sum money.
Such products are more suitable for those with cyclical or infrequent income, as they will not have to worry about financing future premiums and the continuation of life cover.
These products also offer income tax benefits in addition to life cover, scoring significantly over other similar instruments.
One can also customise the plan and enhance the proposition by adding other protection riders of choice.
However, for somebody with stable and regular income, one should consider buying regular paying products as those work better in long-term value creation.
chief & Appointed Actuary, Edelweiss Tokio Life Insurance