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Term Life Insurance: Return Of Premium Plans

We all know what a Term Life Insurance plan is. It is the simplest form of Life Insurance. Do you want a term plan with maturity benefits? Look no further. Let’s tell you everything you need to know about these term plans.

What is Term Life Insurance?   

Term Life Insurance is an insurance policy that safeguards your dependents and loved ones financially, in case you are not around.

Term Life Insurance pays your loved ones an assured sum which should cover their basic financial needs.

While there are different types of Term Life Insurance plans, we will tell you all about Term Life Insurance plans with Return of Premium.

What’s the difference?

A regular Term Insurance Plan offers your nominees only death benefits.

A Term Insurance Return of Premium Plan is beneficial if the insured person survives the term of the policy.

Why?

If the insured person survives the term of the policy, the full premium amount is returned by the insurer.

How does that work?  

Let’s give you an example. You take a policy with a cover of Rs 20 lakh and a tenure of 10 years. The annual premium of the policy is Rs. 2,000.

In case the insured person does not survive the term of the policy, his family will receive Rs. 20 lakh.

If the insured person survives the term of the policy, he will receive Rs. 20,000.

In case the insured person survives the term of the policy, the premium is returned to the insured person by most companies after deduction of service taxes and if there is any additional premium charged.

What’s the catch?

 Features of Term Insurance Return of Premium Plans

Let’s give you a few details about the features of Term Insurance Return of Premium Plans.

The survival benefits in Term Insurance Return of Premium Plans is what makes this plan different from the rest. A Term Insurance Return of Premium Plan pays back the full premium amount after taxes, in the event that the insured person survives the term of the policy.

Term Insurance Return of Premium Policies pay nominees the sum assured if the insured does not survive the term of the policy. Policies with additional riders may have additional benefits.

Additional Reading: 5 Questions You Need to Ask About Term Plans

You get flexible premium payment options for Term Insurance Return of Premium Plans. You can choose a convenient payment option. Choose to pay on a monthly basis, quarterly basis, every six months or annually.

Remember, if you pay the premium on a monthly basis, the amount to be paid is lower, while an annual payment means a higher amount.

The surrender value of a Term Insurance Return of Premium Plan depends on the premium payment option that you select. The surrender value is usually higher for a single premium plan. Various insurers calculate the surrender value differently. It’s a good idea to confirm the calculation of the surrender value when you apply for the Term Insurance Return of Premium Plans.

This benefit is offered under a Term Insurance Return of Premium Plan. This benefit means that the plan will not lapse if the insured person is unable to pay the premium. The policy will continue with a lower cover.

This benefit is usually extended to policyholders after the payment of premiums for a specified number of years.

Additional Reading: Learn about the Types of Term Life Insurance

Entry & Maturity Age

The maturity age for a Term Insurance Return of Premium Plan is 65 years. Get your policy early and get an appropriate number of years of cover.

Policy Tenure

The differentiating factor between regular Insurance plans and Term Insurance Return of Premium Plans is that Term Insurance Return of Premium Plans offer cover for a specified period of time, from 10 years up to 30 years.

Most plans have a maximum maturity age below 70 years. You may find some insurers who offer cover beyond 70 years.

A Term Insurance Return of Premium Plan is a good idea if you’re looking for a Term Insurance Policy with maturity benefits.

Still looking for information on insurance? We’ve got you covered!

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