If there is one thing that the year 2020 has taught each one of us is, it is to value life. One tiny slip can cost you heavily. It has thus become vital to have a secure life insurance cover in place. However, before you plan to buy life insurance, you need to know the integrities of each type of life insurance policy.
Although pure term life insurance plans are widely known, they have limitations as well. This traditional life insurance plan provides coverage to your family when you may not be around. These plans have a tenure ranging between 10-50 years.
A pure term life insurance policy generally offers a high cover at a relatively low premium. Moreover, they do not offer maturity benefits if you outlive the policy tenure. Thus, in the event where you outlive the policy tenure, you will not get any benefit.
Hence, it is better to choose a plan that provides benefits even if you survive the life insurance policy term. You can extend the benefits of a pure term plan by adding a return of premium rider.
What is TROP?
TROP is a variant of a term life insurance plans, specifically designed to cater to insurance seekers’ needs like you. Like any other standard term insurance plan, it also provides financial protection to your family against any type of eventuality.
However, one distinctive feature that sets this plan apart from the other plans is that it provides the benefit of the return of premiums in case you outlive the term.
Before you buy life insurance, it is essential that you understand the benefits of the term insurance with return of premium plan:
- Assured Returns
There are numerous life insurance plans available. Among these, some life insurance plans offer returns, but the returns in many cases are market-linked and are not guaranteed. But term insurance with return of premiums offers assured returns.
If you want to use the lump-sum amount received at maturity to buy a house or a new car, it will be at your discretion. With a clear picture of the returns, you will be able to plan your financials in a better manner.
- Survival Benefit
Contrary to a regular life insurance plan, term insurance with return of premium offers survival benefits. Let’s take an example:
Rohan has insured himself with term insurance with a return of premium feature. Now, consider that he outlives the term of the plan. Here, he will be eligible to get back all the premiums paid during the policy term. Hence, he will get the survival benefit.
You should opt for this insurance product if you do not want to lose out on the paid premiums and want some kind of return from the policy.
- Rider Benefit
A significant factor that you should notice is that regular life insurance plans have a simple structure and have options to enhance the coverage.
Similarly, term insurance with return of premium also offers the same advantage. You can choose to enhance the insurance cover with optional riders. These optional riders can be taken to cover accidental death, accidental disability, and critical illnesses. A term insurance plan with a return of premium when paired with such suitable riders provides comprehensive coverage at affordable rates.
- Tax Benefits
Investing in a term insurance plan with premium return helps increase your tax savings. The premium you pay for the plan is eligible for tax deductions. Section 80C of the Income Tax Act affirms that when premiums of up to Rs 1.5 lakh are paid towards a life insurance policy in a financial year, they are eligible for tax deductions.
Thus, opting for this term insurance will benefit you and your family’s future in the long-run. You can avail of the tax advantages and create an emergency fund.
- Highly Affordable
The term insurance plans with a return of premiums is a smart purchase you can opt for. They are highly affordable compared to many other life insurance plans like endowment plans, whole life insurance plans, and many others. TROP is an excellent choice if you are starting your career and want to choose a pocket-friendly plan.
Secure Self and Family with a Term Insurance with Return of Premium
Not preparing for the future of your loved ones is not a responsible choice. Avoiding to opt for a comprehensive cover only puts the future of your loved ones in danger. However, opting for a plan that offers maturity benefits is an ideal option if you seek a life insurance cover with assured returns.
Before you buy a life insurance policy, you should research all your options. If you plan to purchase term insurance with a return of premium, make sure you select a renowned insurance provider. You can visit the insurer’s website and understand the terms and conditions of the policy in detail.