A person’s dream will never fail to include the goodwill of their family, friends, and other close circles. It is the only thing that makes most people run behind their dreams and achieve them no matter how hard it may seem. Securing the future of our loved ones and family while we are still alive will always remain our top priority. Since we cannot learn what the future holds for us, searching for various financial investments might seem like the initial step towards a secured future.
Many people have various commitments like car loans, mortgages, credit card debts, and other financial liabilities to take care of, and clearing off these obligations will need a strong backup if something happens. The family cannot handle the immense pressure put on them in these situations, and it is better to have a financial backup ready when an event like this occurs. The term insurance policy is a suitable option that can help a family get through an unfortunate circumstance and offer financial security, but it is crucial to understand the term life insurance meaning first.
A term plan with return of premium or TROP is an added benefit to the term insurance policy that can provide various advantages to the policyholder after its maturity period. Like the standard term insurance, the TROP also guarantees financial security to the family in case of any casualties.
The exclusive advantage of the term plan with the return of premium is that the policyholder can receive survival benefits and death benefits if the insured member lives through the policy term. The policyholder can also obtain a full premium refund with the TROP if the option is added to their existing policy.
Valuable Benefits Of A Term Plan With Return Of Premium
The term plan with return of premium offers the policyholder a greater advantage than any other endowment plan available in the market. It guarantees the insured member that they would receive a refund of the total premium amount paid during the policy’s tenure period at the time of maturity.
So, the insured member need not worry about the premium price paid over the years, as the policyholder can get the full amount refunded once the policy term ends.
The Advantage In A Non-Payment Condition
The term plan with return of premium has a paid-up option integrated with it in case the policyholder misses a premium payment. The paid-up option allows the insured members to have a few chances for missing some premium payments while the policy can remain active. The people who do not have a regular or fixed source of income can benefit the most from this option.
The term plan with return of premium will continue for a specific time frame, and after that point, the plan will continue but with reduced benefits (coverage). However, the beneficiary will receive a considerable amount on the death of the policyholder even if the premium payment is discontinued in between the policy term.
The term plan with return of premium will provide tax exemptions on the premium paid on the policy. In addition, the lump sum received at the maturity period is also tax exempted by the regulatory authority, offering the policyholder significant tax benefits.
The term plan with return of premium could be surrendered to the company where the policyholder can no longer have any coverage in place but can receive back a part of the total premium paid during the policy term.
Several Rider Benefits
The term plan with return of premium comes with a set of rider benefits attached with it, and the policyholder can buy the one they want. The rider benefits cover expenses related to accidents, disability, critical illness, and paralysis. The policyholder can obtain all these benefits right from when they sign the policy’s terms and conditions with a little extra cost.
Why Buy A Term Plan With Return Of Premium?
The term plan with return of premium offers the policyholder considerable coverage amount at low premium costs. Since the term plan with return of premium offers survival benefit, death benefit, and total premium refund at the end of the plan’s maturity, the premium price is slightly higher than the regular term insurance policy.
However, this plan can offer the best benefits for a price lower than any endowment plan in that premium price range. Thus, the term plan with return of premium can serve as a backup to the policyholder’s retirement plan or a bonus to the regular term plan and enable him to lead a financially secure life in the future.
Moreover, the individual looking for the best term plan with return of premium can research all the policies available in the market and buy the one that meets all their requirements, budget, and needs. In addition, one can also avail of tax exemptions according to Income Tax Act.