People are often looking for ways to grow their wealth and secure their family’s future along with their own. In such cases, a great deal is always appreciated.
What if there was a term plan that is beneficial for both you and your family—even if you outlive the policy term? Furthermore, what if all these benefits are available without having to spend a significantly higher amount?
If you are intrigued by the idea, then a Term Plan with Return of Premium is what you are looking for.
What is a Term Plan with Return of Premium?
A basic term plan, also known as a level term insurance plan, is a pure protection policy that offers financial security to dependents in case the policyholder has an untimely demise.
On the other hand, a Term Plan with Return of Premium (TROP) goes a step further. If you outlive the policy term, the insurer will return the premiums you’ve paid into the policy. If an unfortunate event occurs during the term, your beneficiaries receive the death benefit, which is the predetermined sum assured for which you’ve been paying premiums.
Essentially, TROP makes your policy cost-neutral while offering the dual benefits of a maturity payout and death benefit in one plan.
How Term Plan With Return Of Premium Works
Here Is An Example To Show You How Term Insurance With Return Of Premium Works:
Sushila Singha is a single 30-year old mother with 2 kids. She is the only child of her ageing parents. As she is the sole breadwinner, she buys a term insurance plan with return of premium with a sum assured for Rs. 50 lakhs.
She chooses a TROP plan with a 30-year premium payment term, for which she pays Rs. 20,000 per year. If she passes away during the policy term, her nominees will get the sum assured of Rs.50 lakhs as death benefit. However, if she survives the policy, she will get a maturity benefit of Rs. 6,00,000 (Rs.20,000 X 30).
Benefits Of Term Plan With Return Of Premium
Term plan with return of premium offers far more benefits than traditional term plans.
100% premiums refunded if you outlive the policy term: Use this money to clear debts or fulfill aspirations.
Retirement savings: The maturity benefit doubles as a retirement corpus which can be reinvested to earn higher returns.
Assured financial security for your family: In case the policyholder passes away before the policy matures, the entire sum assured is paid to the beneficiaries and the policy is terminated.
Protection against misfortunes: At any point of the term, if the policyholder is diagnosed with a terminal illness, your TROP plan may also have the provision of paying part of the sum assured and continue or terminate the policy (as the policy conditions may stipulate) even if the policy has not completed its term.
Continued protection even on discontinued premium payment: Worried what will happen if you miss paying a premium? Well, if you have paid at least the first 2 annual premiums, your Term insurance with return of premium continues to be valid but the payouts will get affected and you will receive a lower death benefit or maturity benefit. You can choose to reinstate the policy to full benefits by paying all your outstanding premiums as well.
Choose the percentage of returns: TROP charges a higher premium but you can still take advantage of its benefits by choosing to have either 50% or 100% of total premiums refunded, as allowed under your plan.
Pay premiums as per your convenience: Pay monthly, quarterly, half yearly, yearly premium.
GST savings: Term plans attract a GST of 18% whereas on term insurance with return of premium, the GST is 4.5% in the first year and 2.25% in the subsequent years.
Tax savings: The premiums paid for the policy are eligible for tax deductions of up to Rs 1.5 lakh per annum under Section 80C of the Income Tax Act, 1961. The payout is exempt from income tax under Section 10 (10D) of the tax laws.
Why To Buy Term Plan With Return Of Premium
You’ve just read about the many advantages TROP plans offer. IndiaFirst Life Guaranteed Protection Plus Plan offers more, apart from return of premium!
Whether you are looking for affordability, flexibility, or customization, this plan delivers on all fronts.
Fulfill all your goals and ambitions, regardless of any unfortunate events such as death or terminal illness.
Enhance your financial protection like never before with innovative coverage options.
Stagger your premium payments, giving you the freedom to pay conveniently.
Tailor the plan to match your commitments with a wide range of payout options.
Adjust your sum assured as per your life stage, giving you the flexibility you deserve.
Get coverage up to 99 years of age.
Life is unpredictable but with term plan with return of premium, you are completely covered. While it may be slightly pricier than a standard term plan upfront, its long-term advantages make it an investment worth considering. TROP is tailor-made for individuals who desire a policy that not only protects their loved ones but also offers a monetary return. It is the perfect balance of protection and profit, providing peace of mind and a tangible benefit.
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