Benefits of surviving through a Term Insurance Plan

2024-08-02

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Term insurance plans are typically pure protection plans. Pure protection plans protect your family financially during your earning years and terminate with your earning age. For example, starting at the age of about 30 and continuing till the age of 60. Term insurance plans typically have a very low premium and terminate without any maturity value if you survive the policy term.

But the low premiums of the pure protection term plans allow you to do a lot more than just protect against a contingency. Here are term insurance plans which can help you get your money’s worth upon surviving the term.

Term Insurance with Return of Premium (TROP)

Term insurance with return of premium option allows you to receive all the premiums you have paid throughout the policy tenure back upon maturity. Thus, reducing the cost of financial protection to your family for 30 years or so to almost nil!

One among the three plan options available with iSelect Smart360 Term Plan, life with return of premium option offers dual policy benefit.

1) On occurrence of death or on diagnosis of terminal illness, whichever happens earlier, during the policy term, sum assured on death is payable.

2) If you outlive the policy term, you will receive a return of the total premiums paid by you at maturity and the policy terminates upon payment of these benefits.

Benefits of Term plan with return of premium –

Canara HSBC Life Insurance iSelect Smart360 Term Plan is a flexible plan that caters to people of different age groups and requirements. So, if you are earning, a term insurance with ROP is ideal for you if –

1) You are single – You may have dependants at this age, your parents who might need financial support, now that you have started earning. Especially if your parents have retired, you will need a term insurance to support their regular expenses if something unfortunate were to happen.

2) You are married – If you have a working spouse, they need to be covered for the same reason you are, ensuring safety of her family and loved ones. Moreover, your non-working spouse may need greater financial support in your absence. Thus, it becomes crucial to be prepared with a backup plan.

3) You are married and have kids – Taking care of kids involve endless expenses in today’s inflation-driven world and a term plan can help support your family in maintaining their current lifestyle, fulfilling your children’s dreams even when you are not around.

Selecting the right plan with return of premium option –

Term insurance plan should ideally protect your dependents until you have built sufficient wealth, or you have financial liability. For example, if you have an extended home loan running you should have term insurance in place, even after the retirement age.

Given the present scenario of building assets using mortgage and loans, it is highly likely that you may have a loan running past your retirement day. But you also want to limit your cash outflow for the post-retirement period to only the necessary items.

Therefore, when buying a term plan, look for the following benefits to ensure the plan doesn’t start to feel like a burden –

An added health component - Comprehensive protection against terminal illnesses, in case something unexpected were to happen.
Premium payment for shorter duration – A limited premium payment option so you pay for a shorter duration, but your cover continues even post retirement.
Multiple payment options – Comfortable premium payment options that does not burden your pockets and fits into your budget.
Coverage for a lifetime – A whole life cover that covers you till 99 years of age, ensuring better security for your family’s future.

Whole Life Insurance with return of premium –

This is a comprehensive insurance plan that not only comes with the flexibility of choice of tenure and sum assured, but also promises benefits once the policy matures or you survive the term of the policy. This term plan covers your family against death until you reach 99 years of age. Meaning the plan will almost certainly pay the benefits to your family.

The insured can also take a loan at lower interest rates and even opt for the maturity payout in a staggered way or as a lump sum. This is the best life insurance plan that gives you financial protection for the lifetime. Therefore, offering three benefits under the same plan –

1) The nominees receive the sum assured on death on occurrence of death or on diagnosis of terminal illness, whichever happens earlier.

2) In case of survival till maturity, the total premiums paid are refunded to the policy holder on the date of maturity.

3) On maturity, the policy continues till you attain 99 years of age which is the extended cover period. During this period, sum assured is paid on occurrence of death or on diagnosis of terminal illness, and if you attaining age 99 years, the sum assured is paid to you.

Thus, these are the two ways you can not only receive your money’s worth at maturity from a term insurance plan, but also do more for your loved ones.