What Is A Term Insurance Plan With Return Of Premium?
The life insurance premium is one of the best ways that you can secure your family’s financial future. Term plans are among the most common and straightforward insurance policies that come with an array of benefits. Moreover, there are different types of term plan policies that cater to distinctive needs. The term plan with return of premium is the type that we will be discussing in this article.
What is Term Insurance With Return of Premium?
For people who wish to avail of a term insurance plan that provides them with survival benefits in addition to the death benefit, they should opt for term insurance with a return of premium. One of the most significant benefits of this term plan is that you can get your premium back. Upon the maturity of the plan, you will get the entire premium amount that you have paid over the years.
On the other hand, other term plans only for the sum assured upon the maturity date. For instance, if you have a policy for Rs. 30 Lakh for 10 years and you are making an annual premium of Rs. 3,000. So once the policy mature, along with Rs. 30 lakhs, you will also get Rs. 30,000, if you survive the tenure.
What Are The Benefits of Term Plans With Return of Premium Policy?
Following are the benefits that make TROP an attractive offering –
- Survival Advantage
Unlike standard term plans, Term insurance with return of premium policy provides you with survival benefits. You manage to survive the policy period; then, you are eligible to get all premiums that you have paid throughout the years. It is ideal for people who want to get the amount they have spent on premiums back.
- Assured Returns
There are different forms of term plans available in the market. Various insurance plans provide you with the return; however, the return in a lot of cases is not guaranteed. The term insurance with returns of the premium policy provides guaranteed returns. In the case of assured returns, you can plan your finances accordingly. The lump-sum amount you will receive at the end of the policy term can be used to fulfill some important commitment.
- Tax Benefits
When you buy term insurance with a return of premium, you get the opportunity to acquire tax benefits. The premium you pay on this policy is subjected to tax deduction up to Rs. 1.5 lakh. This deduction is provided under section 80C of the Income Tax Act.
Final Thoughts
Security for your future financially gives you peace of mind that your loved ones are protected in your absence. There are different kinds of term plans available in the market, and TROP is one of the popular ones. Above, we have shared some essential advantages that this term policy brings. The extra amount that you receive assures you that all the money that you are paying will be given back to you. Lastly, make sure you choose a reliable insurance provider when taking a term plan with a return of premium to get the maximum return on your investment.
Hi Suprabhat. I thought that your article made some great points about term life insurance. However, I would like to expand further on what term life insurance is. As you touched upon in the article, the “term” in term life insurance means that you get coverage and pay premiums for a certain period. That means that if you died with a term life insurance plan in the coverage period, your beneficiaries would get the benefit. As an elder law attorney, I advise clients to buy term life insurance plans when they need coverage for short term or medium term reasons. For example, some clients would purchase term life insurance for their child or grandchild, so that if he or she died before the child turned 18, they would receive the benefit.
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