Among all the life insurance policies available in the market, a term insurance plan is the simplest way to understand the product. Pure life covers focus on offering your dependants the sum assured in case you are not around. You just have to ensure that the premium is paid on time.
However, even then, when the time comes to make the final decision, you may shy away from buying it. It is simply because it does not provide any maturity benefit. A thought might play in your mind that if you survive the policy tenure, then the entire money will go to waste.
And it is exactly here that term insurance with return of premium plan enters, to put your mind at ease. Popularly known as TROP, it is a term plan and provides a maturity benefit at the end of the policy tenure.
To understand the importance of this plan, read the following example:
Mr Rajesh Verma is working hard daily for the sustenance of his family. He has two children and dependant parents. To ensure that his family is well-protected, he opts for a term plan with return of premium. He continues paying the premium amount throughout the tenure. And by God’s grace, he is well and is still working for the betterment of his family.
Now, once the tenure of the plan is over, he will not get life coverage anymore. However, since he opted for term insurance with return of premium, he will get maturity benefits. Thus, the premium payments that he made throughout the tenure would not go to waste.
If you are unclear about your decision, you can ask yourself these questions to determine if term insurance with return of premium is best for you or not:
Can You Afford to Invest Only in Life Cover?
Say you have just started your career, you may find it challenging to balance your finances. You may be shouldering many responsibilities, that of your parents and even your day to day expenses. Opting for a term insurance policy with the maturity benefit may seem the best option in this scenario. The premiums for such plans are slightly less than term plans with return of premium.
However, you should think of far ahead and plan your financials accordingly. For instance, if you live through your term insurance tenure and then a financial crisis occurs. In this situation, it can burden you heavily, and you will not have monetary resources. But with term insurance with return of premium, you will get maturity term insurance benefits that will come to your rescue when in need.
So, it will be highly beneficial to pay a little extra and secure your future against any abnormalities. You can easily use the premium calculator available on many insurance providers’ websites and calculate the amount to be paid. Besides, it can help you get a better understanding of how to plan your financial portfolio.
What Are Your Financial Responsibilities?
Maybe currently, you are not planning to grow your family. However, a few years down the line, you may start thinking of settling down. You might get married and have children. Then, with your parents, you will have more people for whom you would be responsible.
It would help if you also kept in mind that as your family grows, needs and requirements also change. After getting married, you may want to purchase a new house or a car. And once you have children, you will have to look after them and their needs.
And around this time, if something happens to you, your dependents will get only the death benefit if you have a term insurance plan. But if you have term insurance with return of premium, they will get the additional maturity benefit. In this manner, your family will be secured financially and will live without making any compromises.
Is Your Health in the Best Condition?
No one can predict the future. While you may be living a great life right now, you cannot comprehend what will happen in the future. For instance, you may opt for term insurance with the return of premium benefit. Your life is running smoothly, and the tenure of your life cover comes to an end.
If you opt for term insurance with return of premium, you will get the maturity benefit. This amount can be used for your future financial obligations or treatment.
Consider the answers to these questions and understand how the term plan with return of premium offers more than the basic term insurance benefits.
Apart from this, term insurance with return of premium also offers tax benefits. This plan is eligible for tax deductions under Section 80C of the Income Tax Act. You can read the policy wording on reliable insurers websites like Max Life insurance’s website to know more details. In case of any query, contact their team, and they will happily guide you through the policy wordings.