What Are The Advantages Of Purchasing Term Insurance With Return Of Premiums?

Term insurance is the most basic type of life insurance available. You get a sum assured to cover your life under a term insurance plan, and the premiums are substantially lower than what you'd pay for a ULIP or an endowment plan. A term insurance policy can also serve as a backup to any other investments you may have made, in the sense that if those investments fail to pay out due to factors such as volatile markets (especially in the case of ULIPs), a term insurance policy will pay out the death benefits. It also allows you to leave a substantial sum of money to your family without having to pay exorbitant fees, making it quite reasonable.

The following article focuses on a type of term insurance plan that offers a return of premiums. So, read on to learn about the advantages of such plans in detail. 

What is a Term Insurance Plan With Return of Premiums?

On the death of the insured, a regular term insurance plan pays the sum assured. Aside from the money assured, there are no other payments. In the event of the insured's death, the TROP pays the sum assured to the nominees. However, if the insured lives to the end of the policy term, they will receive a refund of all premiums paid throughout the policy period. On the death of the insured, a regular term insurance plan pays the sum assured. Aside from the money assured, there are no other payments. In the event of the insured's death, the TROP pays the sum assured to the nominees. However, if the insured lives to the end of the policy term, they will receive a refund of all premiums paid throughout the policy period.

Also read - Everything You Need To Know About Term insurance Plan

What are the Benefits of Term Insurance Plan With Return of Premiums?

A term insurance policy with a return of premium provides a number of advantages to policyholders.

1. Death Benefits - The nominee will be paid the total sum assured as the death benefit if the life insured dies.

2. Tax Benefits - The premiums paid for these plans are deductible under section 80C of the Income Tax Act.

3. Maturity Benefits/Survival Benefits - Since this is a return of premium plan, the maturity benefit will be a complete refund of all premiums paid.

4. Riders - These plans can be combined with a variety of insurer-provided riders, such as an accidental death rider or a critical illness rider.

5. Paid Up Value - If the policy's premiums aren't paid, and the policy expires without being revived, the insurers will cut the death benefits to match the premiums paid and maintain life coverage until the policy term ends.

6. Policy Discontinuation - If you opt to cancel your coverage, some insurers will refund your payments with a fee or a predetermined sum.

Take Away

Term insurance with a return of premium is more advantageous than standard term insurance. It's a great option for folks who don't want to lose money on their premiums but still want a return on their investment. If something happens to you, the quantity of insurance you have should be enough to secure your family's financial future. 

You may also like to read - Want To Make The Most Of Free-Look Period Of Your Term Insurance? Know How

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.