Ever wonder if there’s a life insurance policy that, in the event that everything goes according to plan(where you outlive the policy tenure), both protects your loved ones and provides them with financial assistance? The solution you’ve been looking for may be found in the Term Plan with Return of Premium (TROP)! This product offers the financial advantage of receiving your payments back in the event that you outlive the policy’s term, in addition to the security of a term life insurance policy.
Curious? All of your questions are answered by our comprehensive guide on term plans with return of premium. We’ll go through all of the ins and outs of TROP to help you make an informed choice.
Overview of the Term Plan with Premium Refund
Similar to a standard best term insurance policy, the term plan with a return of premium also offers the benefit of financial coverage to the insured’s family against any type of emergency. It is the maturity benefit that is the primary distinction between a term plan with return of premium and other term plans. Apart from the maturity benefits, the policyholder also gets survival benefits as well as death benefits. In other words, the nominee will get the sum assured in the event that the policyholder is demised. However, if the policyholder lives out the entire term, s/he will get the premium at maturity.
Salient features of Term Insurance with Return of Premium
- The term plan has a policy duration of five to thirty-five years. The insurance period, the premium amount, and the payment schedule are all up to you to select. Upon maturity of the policy, your premium will be reimbursed by the insurer. The age of maturity can be 75 years and there is no cap on the sum assured.
- The recovery of their money is guaranteed under a return of premium term plan, so policyholders do not need to worry about it. With this policy plan, returns on the entire premium paid—that is, without the additional premium paid for any riders or add-ons—are assured.
- The policy buyer has several options for paying life insurance premiums for the best term insurance when purchasing a term plan with return of premium. These options allow the buyer to select the best option based on suitability and range from monthly to annual options.
- Term insurance with return of premium offers a “paid-up” option for people without a fixed income or source of income. This feature assists policyholders in the event that they fail to make premium payments on time.
How Does Term Insurance with Return of Premium Work?
Let’s demonstrate how this plan works:
Consider a term plan with a cover of Rs. 40 lakh for a ten-year period, with an annual premium of Rs. 4000. The family would receive Rs 40 lakh as the money assured in the event that the life assured passes away. However, the insurance firm would reimburse the whole premium sum of Rs. 40,000 (Rs. 4000 X 10) if the life assured lives out the entire policy term.
Term insurance with return of premium plans are non-participating insurance policies that provide the insured’s family with a death benefit and, in the event that the life assured survives the policy’s duration, a term insurance with return of premium benefit will be provided to them.
How to choose Term Insurance with Return of Premium
- It is essential to take into account a number of factors while selecting a best term insurance plan. Here are some important things to keep in mind to help you in making the best decision:
- Determine the level of coverage you require to guarantee the financial stability of your family in the case of your untimely demise.
- Make sure the premiums are reasonably priced so you can pay them on a regular basis without having to forgo other expenses.
- Check if the insurance company has a high claim settlement ratio, as it indicates that it has a history of paying claims successfully and promptly.
- To make it simpler to remember to pay your premiums, select a term plan that offers flexible payment options, including annual, half-yearly, quarterly, or monthly instalments.
Advantages of Term Plans with a Return of Premium
Maturity Benefits: At maturity, the term plan with a premium return provides a benefit of a 100% premium return.
Death benefits: The term plan provides death benefits, whereby the nominee receives payment in full of the assured amount in the event of the untimely death of the policyholder.
Tax benefits: Policyholders may be able to claim tax benefits on their premium payments under section 80C of the Income Tax Act.
Why should I Consider a Term plan with a premium return?
Here are some arguments to persuade you to make this investment:
Maturity return that isn’t present in other plans: If the policyholder lives out of the term plan, you will receive your premium back at maturity. If you are seeking dual benefits and are willing to pay a slightly higher premium, this is the best term plan for you because it offers a benefit that is not available in any other plan.
Guaranteed profits: Assured returns on the entire amount paid are provided by this term plan. This suggests that the insured will always receive their money back.
Choices for paying a premium: Policyholders have four alternatives for paying their premiums: monthly, quarterly, half-yearly, and annually. The individual can select the appropriate payment method without having to worry about the payment.
At last,
To make sure that your family is secure even if you are not around, life insurance is essential. However, if you make it through the term plan, it’s also crucial to receive a portion of your investment back. Therefore, among the best insurance plans you can think about is the term plan with a premium return. You will benefit from this in both situations.