New Delhi: The uncertainties of life and the fear of untoward incidents become enough reason to buy life insurance. An accident or a serious illness at any time in your life can suddenly bring a big financial trouble on your family. Life insurance protects your family right now. If life insurance is present after the death of the earning member of the household, then you also get financial stability. Overall, life insurance provides financial security to your dependents upon your death, which is given in lump sum or in regular installments as per the requirement.
Due to increasing liabilities and dependents in life, people are now forced to invest in term plans. People who buy this cover are those who are children or they have taken a loan. The most important thing is that a term plan is the only insurance policy that you must buy because in this you get big coverage at a very low price. Now you can buy term insurance up to the age of 99+, which was not possible till a few years ago.
Regular term plan
A pure term insurance plan is one that provides coverage for a predetermined number of years. This period can be anything between 5 and 45 years. In this plan, the policyholder’s nominee has the right to get the main plan benefit, which is given on the death of the policyholder during the policy period. But there is no rule in this plan to give maturity amount. This means that if the policyholder remains alive at the end of the plan period, he will not get any benefit. A pure life insurance plan is one that provides the benefit of the sum assured in case of death of the policyholder during the term of the plan (ie lifetime). As its name implies, a pure insurance plan provides a person with complete insurance coverage throughout his life.
The pure term insurance plan does not have any monetary cash value and is a simple insurance plan that only offers death benefits to the policyholder. The major advantage of pure term insurance is that it is the most economically priced insurance product available in the market. In this, you get the benefit of getting coverage for the policy term with a fixed rate of premium.
Term Insurance – Return of Premium
It is a popular option that comes with term insurance. Return of premium (ROP) insurance means that you get all the premiums paid back in the form of Maturity Benefit. As a policy customer you can choose the term of the policy according to your needs. Generally, Indian customers expect some return from life insurance policies, irrespective of the premium paid by them. For investors who expect higher returns, ROP is a money-saving policy. As an investor, you can decide the term or duration of the policy according to your financial situation.
This policy is generally available for 20, 25, 30 and 40 years. For example, if you have taken a loan of 20 years duration, then you can buy a term life plan of 20 years. If something happens to you during the policy period, you will not have to worry about your loan. At the same time, if you survive after the policy term, you will get back 100% of all the premiums paid by you.
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The maturity or survival benefit of a return of premium plan is quite different from a normal term policy. In an ROP plan, the more premium the policyholder stays in the insurance cover, the more premium he gets back. At the same time, there are many plans in which the insurance company pays more than the total amount of premium paid by the customer, but for this the policyholder has to fulfill certain conditions. In addition, the entire maturity amount received by the policyholder is tax free.
Premium payment
For the convenience of customers, insurance companies have introduced various options of premium payment. Now you can choose a convenient payment option according to your financial situation. Standard premium payment options presently on the market include annual, semi-annual, quarterly and monthly payment options. At the same time, some insurance companies also offer a single premium payment option, in which you can pay the premium in one go for the entire duration of the policy.
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