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Why a Whole Life Plan with ROP is the Smarter Way of Buying Life Insurance?

Updated On Oct 04, 2021

A whole life insurance policy provides coverage until the life assured passes away. As long as the life assured pays the premiums, the policy will remain in effect. When the life assured passes away, the sum assured, or coverage, that was decided at the time of policy purchase, is paid to the nominee. The average age of maturity is 100 years. The nominee receives the sum assured if the life assured dies before reaching the age of 100. If the life assured lives to be 100 years old, the insurance company will pay all the premiums paid to the life assured.

Why a Whole Life Insurance Plan with Return of Premium is the Smarter Way of Buying Life Insurance?

Here are some of the benefits of a whole life insurance plan with a return of premium option.

  • Coverage for Life - A whole life insurance policy offers coverage until the life assured dies. The insured is protected against death for the rest of his life or until he reaches the age of 100.
  • Assurance of Coverage - Whole life insurance coverage promises to be a reliable source of income for the family  that will look after your dependents if you, the breadwinner, pass away.
  • Tax Benefits - Under Section 80C of the Income Tax Act of 1961, the premium paid for the policy is tax free. Under Section 10(10D) of the Income Tax Act of 1961, the payout to the nominee is tax-free.
  • Serves as a Cash Reserve - According to experts, people save six to nine months' worth of expenses in liquid form to be used in an emergency, such as illness or job loss. While it is difficult to keep such a huge savings account, a whole-life plan pays out a large sum at the end of the premium payment period.
  • Loan Option - As a whole life insurance policy covers the life assured for the rest of one's life, one can take out a loan against it. Furthermore, when the surrender value of the policy rises over time, you can borrow against it, which is a better option than mortgaging your property.
  • This Plan Will Benefit Your Dependents - Whole-life plans are an excellent way to ensure that you leave a lasting legacy. For example, a whole-life plan for both spouses will provide an additional financial resource that may be relied on later in retirement. The policy death benefit will be paid to the surviving spouse if one of the spouses dies.

  • Children’s Future - After the insured person's death, the spouse's insurance will leave a minimum bequest to children or grandchildren. As a result, whole-life plans are an excellent notion for future wealth development and transfer to successors.

Who Should Opt for a Whole Life Insurance Plan with ROP Option?

Every earner should make provisions for their family's financial security. For many people, whole life insurance is an appropriate form of protection. 

  • People who desire to leave their children with a legacy.
  • Whole life insurance policies should also be included in a financial portfolio because they provide a possibility for return of premiums in addition to life insurance.
  • Because a whole life plan includes a partial withdrawal option, you can be financially independent when you retire.
  • Whole life plans are fantastic to get if you're looking for tax saving plans, as all premiums paid are tax free.

Take Away

A whole life plan with return of premium option is a one-of-a-kind life insurance policy. The primary goal of whole life insurance is to allow the policyholder to live a worry-free life while also leaving a legacy for their heirs. The life assured is protected until death, and it also includes a maturity benefit. Therefore, choosing the best term insurance plan with whole life coverage and premium return can be the smartest way of buying life insurance.

Also read: 

How To Choose The Best Life Insurance Company?

What Makes Life Insurance And Term Insurance Different?

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.          

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