Being a responsible individual, you understand the necessity of protecting your loved ones with a life insurance cover. The insurance policy aims to protect your family from any financial trouble in case you are not around. They offer a sum assured that acts as a financial security cover.
But with general term insurance plans, if you outlive the policy term and it matures, the premium paid throughout the term will not be returned. Hence, it will be a better idea to opt for a term plan with return of premium.
The term insurance with return of premium requires you to pay a premium for a specific sum assured or life cover. The premium can be paid throughout the plan. It can range from 5-25 years, depending upon the insurance company and the plan being offered. Under a term policy with return of premium, you will receive the entire premium paid towards the policy back at the time of maturity.
Before choosing a term plan with return of premium, you should also keep in mind a specific argument. The payable premiums of these plans are slightly higher in comparison to the traditional insurance policies. But the accrued benefits are no doubt, in proportion to the payable premiums. Thus, you should opt for term insurance with return of premium only if it is affordable for you.
Along with a term plan with return of premium, you can select other riders for additional benefits, such as:
1. Accidental Death Benefit
It is essential to add this rider to your term plan with return of premium as it manages a flat-out, irreversible misfortune like your absence. In case of an unfortunate accident, your loved ones will be left to manage the grief and will likewise be confronted with gigantic money related pressure. Since the medical expenses are a monstrous cost as of now, your loved ones may have to manage the emotional toll as well as future pay.
With term insurance with return of premium and accidental death benefit rider, the blow of this two-fold tragedy can be managed. This arrangement will shield your family from setbacks like weakening of the family’s income for many years.
2. Protection Against Critical Illness
You may suffer from any critical illness at any stage of life. Moreover, the treatment expenses incurred towards these ailments could easily exhaust your income as well as your savings. Although the term plan with return of premium is essentially a life cover, you can opt for a critical illness cover along with it.
This additional rider option will prevent you from paying for the incurred medical expenditure. As life has unpredictable twists and turns, you never know what is coming next. Hence, it will be advisable to opt for the critical illness cover with your term insurance plan.
3. Disability Benefit
Choosing a disability benefit rider along with your term plan with return of premium can become greatly useful in case of permanent disability. In such situations, most insurance providers will pay you a certain percentage of the sum assured as defined in the policy terms. Insurers follow this timeline as per the Insurance Regulatory and Development Authority of India (IRDAI). It can be something like 10% of the sum assured per year for the next ten years.
This way, you can rely on this rider for an income source. However, it is essential to note that this rider comes into force only if the disability occurs due to an accident.
4. Waiver of Premium Benefit
Adding this rider to your term plan with return of premium is essential. Your policy does not get surrendered with this rider if you falter in paying your future premium due to disability or income loss. The future premiums get waived off in such circumstances.
If, for instance, this rider is not chosen and you are unable to pay the premiums because of a disability, you need not worry about paying the premiums ahead.
While these are some of the benefits that term plan with return of premium offer, the primary benefit is that it will take care of your family. If you have parents who would depend on you after their retirement, you can take care of their lifestyle expenses with this maturity benefit. Likewise, you can secure your growing family financially for your child’s education and marriage expenses. But before you opt for a term plan with return of premium, make sure that you know what is life insurance in detail. Since the basic plan will be a term plan, you should know everything about the riders and which ones to include.