If you’re looking to safeguard your family against uncertain events in life, term insurance plans are the perfect investment avenue available for you. It’s a highly popular variant of life insurance in India that offers higher coverage at very nominal premium rates.
While it’s one of the most affordable options to secure your family’s future financially, some people still hesitate to purchase a term plan because it involves no maturity benefit. In simple terms, you won’t get any benefit from the plan if you survive throughout the policy tenure.
However, keeping this situation in mind, several insurance companies have come up with something known as term insurance plans with returns on premiums. The name itself is pretty self-intuitive but make sure you keep reading to explore more about this unique variant of term plan.
A term plan is the simplest variant of life insurance policies that protects you against the risk of untimely death. It’s more affordable than whole life plans and provides higher coverage at very nominal premium rates.
The premiums for these plans remain the same throughout the policy tenure. However, if you choose to go with a standard term insurance plan, you cannot expect any other returns on term plans apart from the death benefit.
To understand these variants better, you have to understand how a term plan works. You pay premiums for the quoted sum assured throughout the policy, which may range anywhere between 5 and 30 years, depending on your preferred insurance providers.
When the policy matures, the premiums you’ve paid throughout the policy tenure will be returned to you in TROP. However, in the event of death during the timeframe, only the death benefit will be paid to your nominee.
For instance, if a policy is worth Rs. 30 Lakh with a tenure of 10 years, the annual premiums will be Rs. 2,000 for the benefits. Now, in case of your unfortunate demise during the tenure, your nominee will be paid Rs. 30 Lakh as a death benefit.
However, if you survive throughout the policy tenure, you will get the entire premium amount you’ve paid throughout the time i.e., Rs. 30,000. It is essentially a non-participating insurance plan that carries some notable benefits as compared to a pure term plan.
While a pure term plan offers only a death benefit, TROP offers maturity return on term plan. However, keep in mind that in comparison to pure term plans, the required premiums will be slightly higher for term insurance plans with the return of premium.
The Canara HSBC OBC iSelect Star Term Plan is a highly customizable non-linked term plan that provides several different options for coverage, benefit payouts, and premium payments in addition to the return of the premium option.
It’s a very affordable term insurance plan that also allows you to add your spouse to the same policy at discounted rates. Moreover, you can choose from multiple premium payment options, including options like single payment, limited duration payment, and payment till 60.
Max Life Premium Return Protection Plan is also a TROP that covers you against various uncertainties of life. The plan features both survival and death benefits, which also includes the extra premiums you’ve paid for additional benefits.
Moreover, with this plan, you can enjoy long-term protection for your family by choosing a policy term of 20, 25, or even 30 years. It is also eligible for tax benefits on the premium and the proceeds as per the Income Tax Act of India.
The MetLife Suraksha TROP is an individual term plan that offers guaranteed additions of 10% of the premiums paid for the policy benefits. The plan also features both single and limited pay options as per your financial capabilities and requirements.
Moreover, you can also choose from various additional riders to extend the coverage of your policy. The premiums paid up to Rs. 1 Lakh are also eligible for tax deduction from the taxable income as per section 80C of the Income Tax Act of India.
The ICICI Prudential Life Guard is a unique term insurance plan that allows you to extend the coverage of your policy for five years after the maturity period without any additional payments. However, if you avail of this feature, your nominee will receive 50% of the original assured sum in the event of your death.
This plan also includes a guaranteed surrender value and allows you to choose from two optional riders to extend the coverage of your policy. The minimum policy term required for this plan is 10 years that can go as high as 30 years.
The iRaksha TROP is a non-linked, non-participating, and individual life insurance savings plan. It provides coverage for up to 100 years of age. This offers both financial protection and survival benefits. These are based on circumstances that may occur in the future.
Moreover, if you choose a higher sum assured, you may also enjoy additional discounts on the premium. The plan also provides additional concessions for women and non-smoker policyholders. You can also choose from a variety of riders as per your requirements.
A term life insurance policy with Return of Premium (ROP) is an ideal solution for people who want added protection. Especially, against unforeseen, yet likely financial disasters. For example, terminal illness, permanent disability, or death. It's also great for anyone with debt that could be passed on to loved ones if something were to happen.