You must have heard of term insurance. It is one of the most important tools to secure your family financially in recent years. Now, term plans are basic coverage policies that offer a fixed sum assured amount to your nominees in case you pass away, unfortunately, within the policy duration. While this gives you peace of mind, knowing that your loved ones are secured financially in your potential absence, some questions may also crop up alongside. For example, many people often refrain from purchasing these plans due to the lack of proper savings or investment options attached to them. This is one issue that often leads to many people choosing other savings and investments over term insurance policies.
If you are also facing the same dilemma, i.e., you want to secure your family members with proper life coverage but want some return at maturity, then you can consider a Term Insurance with Return of Premium (TROP) policy. How is it different? It’s like the best of two worlds: you get adequate life insurance coverage just like a regular term policy, but with the return of the base premiums paid once the maturity date arrives (in case you survive the tenure).
How a Term Insurance Return of Premium Plan Is Advantageous for You?
When selecting a term insurance return of premium plan, the core components will remain exactly the same as any basic term policy. The only additional advantage is that you enjoy the return of premium facilities. So, if you die within the tenure of the policy, the nominees will, of course, receive the sum assured, just like in regular term plans. Yet, if you survive this tenure, then the base premiums you pay will be returned, excluding any rider costs, taxes, or additional charges.
Here is how it benefits you:
- It is an ideal option if you wish to purchase life insurance coverage with the added benefit of getting back your paid premiums.
- You may use this maturity amount to cover various financial needs, ranging from down payments for a home to your child’s higher education, family weddings, and so on.
- There are flexible options to pay the premium at your convenience, i.e., every month, yearly, etc., though availability may vary depending on the insurer.
- Premium payments will get you tax deductions (under Section 80C), and the maturity and death benefits will generally be exempted under Section 10(10D), provided the premium-to-sum assured ratio meets the specified guidelines.
- You can also add riders to enhance overall coverage. Some options include premium waivers, critical illnesses, and more, depending on the insurer.
These are some benefits that make these plans worthwhile for almost everyone. However, as premiums for TROP plans are generally higher than regular term plans, it is important to compare options carefully. You should choose a plan tailored to your specific requirements.
Get a Term Insurance Plan with the Return of Premium Facility
You can choose a term insurance return of premium plan after comparing multiple insurance companies and their products. This policy will help you get the dual benefits of life coverage with some returns to look forward to once it matures (assuming you survive the policy tenure). Keep in mind that the maturity amount may not grow over time and could be affected by inflation. Comparing regular term plans alongside TROP policies may also help you make an informed decision.