How can a Term Plan with a Return of Premium Be a Smart Financial Decision?

Should you opt for a term plan with return of premium? The answer can be a resounding Yes, provided you’re looking for a return component with your plan. Many people appreciate the benefits of term plans in terms of providing high-life coverage throughout their working years and financial security for their nominees in case of their demise. However, they often end up choosing other types of life insurance plans with investment/cash value components and returns. The key grouse of these investors is that term plans do not normally offer any returns. Yet, you can solve this aspect by selecting a term plan that has the return of premium attribute. Let’s take a closer look at the same accordingly.

Term Plan with Return of Premium- Why Choose It?

Choosing a term plan with return of premium is a great option for various reasons. Here’s looking at them below:

• The plan works similarly to a regular-term insurance policy in terms of life coverage. Insurance companies pay a fixed sum to the nominees in case of the policyholder’s demise within the tenure of the plan. So, life coverage stays intact as the key feature of the policy.
• The core aspect that is different is that there is a refund of the base premiums paid in case the policyholder lives till the maturity date. This refund does not include GST, rider premiums, or any extra loading due to health or lifestyle factors.
• These plans are simple and easy to understand while offering ample life coverage and financial support for family members against life’s uncertainties. At the same time, in case the policyholder survives the tenure, then it also offers an assured return of funds that can be used to meet diverse needs. From planning for retirement to meeting higher education costs of children, there are several such requirements that can be covered.
• You may choose policy tenures up to 30 years or even less. At the same time, there may also be an option to flexibly choose the frequency of your premium payments.
• Other advantages include tax deductions on premiums as per Section 80C, subject to conditions, while Section 10 (10D) also offers exemptions on the maturity amount or death benefit, whichever is applicable. But the sum assured should be at least ten times the annual premium.
• Riders can also be used for widening the scope of your coverage under the policy. You can select critical or terminal illness riders, which offer a payout upon the diagnosis of the covered condition and also a premium waiver among other options. Accidental disability or death coverage is available only if riders are purchased separately. 

Choose a Term Plan with Return of Premium Today

Selecting a term plan with return of premium can be beneficial if you’re looking to financially secure your family while getting a return simultaneously. This is where you get dual benefits, enabling you to gain mental peace while also receiving a refund of the base premium in case you survive the policy tenure. However, given that these plans come at a higher cost than pure term plans, comparing them with other insurance and investment options can help ensure the right financial decision. These plans also have riders and tax benefits, making them viable options for several individuals. So, without further delays, choose your plan today and secure your loved ones seamlessly.