Term Insurance Plan with Return of Premium - Is It Worth Buying?

By Shivangi - 08 Apr 2022 Last Updated: 19 May 2022
Term Insurance Plan with Return of Premium - Is It Worth Buying?

Traditional life insurance plans are the type of plans that most individuals still have and pay large sums of money for the insurance coverage. However, due to practical approaches, a growing number of people are abandoning traditional Life Insurance plans such as endowment plans, money-back plans, and so on in favour of a term insurance plan.

The main reason why people used to choose traditional life insurance policies is that they receive some returns, either monthly or at maturity, depending on the type of policy they choose. However, many insurance firms now offer term plans with premium refunds. You will also gain from maturity. Plus, you will be getting maturity benefits. So, would it be a great  decision to buy such a policy? Let’s check it out in this article.

What is the Term Plan with Return of Premium?

Term plan with return of premium (TROP) is a type of term plan that is primarily designed to suit the insurance needs of policyholders. TROP, like regular term plans, provides financial protection to the insured's beneficiaries in the case of his or her death.

TROP, on the other hand, has one distinguishing element that sets it apart from other term insurance plans. And it is that a term plan with return of premium offers the policyholder with the benefit of the return of premium as a survival benefit if he or she outlives the term of the insurance policy.

Read more :-What is Term Life Insurance in UAE

Policy Term

As a policyholder, you can choose the duration or term based on your financial stability. TROP is often available for 20, 25, 30, and 40 years. Let's say you decide to get a 25-year term insurance policy if you have a 25-year loan to repay, and if something happens to you during the term insurance policy's term, you won't have to worry about repaying the amount.

Premium Payment

For the convenience of their customers, the majority of the biggest life insurance firms have now established different premium payment plans that provide incredible flexibility in paying premium for the insurance policy. You can choose a payment method that is appropriate for your financial situation.

Benefits of Term Insurance Plan with Return of Premium

There are numerous advantages to a term insurance plan with premium return, some of which are listed below:

Death Benefits

In the event of the policyholder's untimely death owing to any cause, the insurer will pay the death benefit as a lump amount to the beneficiary(s). Varying insurers provide different sum guaranteed amounts dependent on the type of plan or premium mode selected by the policyholder.

Survival Benefits/Maturity Benefits

TROP's maturity benefit is what differentiates it from a standard term plan. A pure term life insurance policy does not provide any maturity or survival rewards to the policyholder. However, in a term plan with return of premium, the policyholder receives all of the money that he or she has invested as the plan's premium after the policy's tenure is over.

Additional Benefits/Riders

To supplement the insurance coverage of their TROP plan, the policyholder can choose riders such as accidental death benefits, critical illness, hospital cash benefit, involuntary loss of income, and so on.

Paid Up Value

This is a one-of-a-kind benefit provided by select insurance providers under TROP. In comparison to a reduced insurance cover, the policy remains in effect if the insured is unable to make the premium payment under this plan.

Top Reasons Why Should You Opt For Term Plan with Return of Premium

Every one of us wants a happy and healthy life in the presence of our loved ones. To live a long lifespan, we choose a healthy lifestyle and adhere to a proper eating plan. In addition, we invest in various financial products that not only provide financial security but also provide prospects for wealth building, allowing us to avoid financial stress.

As a result, there is a chance that if we maintain a healthy lifestyle and remain happy, we will outlive the life insurance coverage. As a result, TROP (term insurance plan with return of premium) provides an additional benefit by returning premiums to the policyholder if he or she outlives the policy's tenure.

Now, let’s have a look at the key reasons why should you opt for TROP:

  • TROP is primarily designed for people who want to provide financial security to their family members while they are away, as well as the benefit of survival benefits. This sort of insurance policy, as the name implies, provides both coverage and a refund of premiums.

  • A term insurance plan with premium return provides assured returns on the total amount of premium paid.

  • This sort of plan guarantees that the policyholder will receive the money if he or she outlives the policy term.

  • It gives you complete peace of mind by providing financial protection to your loved ones in the case of your untimely death.\

Conclusion

Based on the information provided, we may conclude that a term insurance plan with a return of premium is worthwhile to purchase. Because it provides insurance coverage as a death benefit as well as the benefit of a return of premium as a maturity benefit if the policyholder outlives the whole policy tenure. It is also less expensive than other types of life insurance policies; therefore it is easily affordable for everyone.Dhanguard has given you the detailed information about this particular topic.Connect with Dhanguard for all the services you need!Dhanguard always stand with its client and try to solve each and every problem.

By Shivangi

08-Apr, 2022

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