How to Stop Paying Term Insurance Premium - Without Cancelling It ?!?

Can One Smart Mutual Fund SIP Pay Your Term Insurance for Life?

What if your term insurance premium never touched your salary again - ever?
What if a simple mutual fund plan could permanently take care of it?

What Will You Learn

How to make your term insurance premium self-funded
How SIPs can convert an expense into a lifelong system
The exact corpus needed when the premium is constant using clients' data
How much SIP you should start today
Why discipline matters more than returns

First, One Important Clarity

Term insurance premium is constant
If you pay ₹45,000 per year today, it remains ₹45,000 forever
There is no yearly increase
This makes planning much easier and safer

The Real Question Investors Ask

“Can my mutual fund profits alone pay my term insurance premium for my entire life?”

The answer is YES with the right structure.

Client Details (To Respect Privacy, Name & Location is hidden)

Current Age: 42
Target Age to Make Insurance Free: 47
Annual Term Insurance Premium: ₹45,000 (constant)
Investment Horizon: Long term
Expected MF Return: 11–12% per year
Withdrawal Rule: Only from profits, not capital

Step 1: How Much Withdrawal Required for Premium Payment?

Required every year from age 47 onwards: ₹45,000
Since the premium does not increase, withdrawals stay flat
This greatly reduces risk

Step 2: How Much Corpus Is Needed at Age 47?

To safely withdraw ₹45,000 every year forever:

Use a 4% conservative withdrawal rule

Required Corpus:


₹45,000 ÷ 4% = ₹11.25 Lakhs

₹11–12 lakhs corpus is sufficient

Step 3: How Much SIP Is Needed Today?

Time available: 5 years (age 42 to 47)
Target corpus: ₹12 lakhs

Monthly SIP Required (12% return assumption):

₹13,000 → ~₹10.5 lakhs (tight)
₹15,000 → ~₹12.2 lakhs (comfortable)
₹18,000 → ~₹14.5 lakhs (very safe)

₹15,000 per month SIP is ideal

How the System Works (Very Simple)

Mutual fund grows at ~11–12%
Annual profit generated > ₹45,000
Premium is paid fully from returns
Capital remains invested and keeps growing

This turns insurance into a self-running financial machine.

Why This Strategy Is Powerful

No dependency on salary
No stress during job changes
No impact during retirement
No fear of premium burden in old age
One-time setup, lifelong benefit

Important Safety Rules

Do not withdraw more than 4–5%
Keep one-year premium in liquid fund
Review portfolio every 2–3 years
Stay invested during market volatility

Role of a Mutual Fund Advisor

A good MF advisor adds value by:

Selecting the right fund mix
Controlling risk during market extremes
Ensuring withdrawals are tax-efficient
Preventing emotional exit decisions
Keeping the plan aligned for decades

This strategy succeeds on discipline, not predictions.

Recap & Final Verdict

Term insurance premium is constant
A ₹15,000 monthly SIP for 5 years is enough
₹12 lakh corpus can pay premium for life
Capital stays intact
Insurance becomes effectively free

Final Verdict

This is not just investment planning.
This is financial intelligence at work.

You are not paying insurance anymore.
Your money is paying it for you.

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