The return of premium term plan is similar to a standard term plan. This plan works like a life insurance policy and provides a death benefit to the policy beneficiary. The special feature of this is maturity benefit. Policyholders can avail term plan with return of premium by paying additional premium.
When it comes to life insurance or life insurance, the first thing that comes to our mind is term insurance plan. The reason for this is that this plan is quite cheap and has a higher risk cover. To provide future financial security to your family, everyone should take out term insurance. At the same time, when a person buys term insurance, he thinks that he will get some amount of cashback. Because, this plan runs for a long time and does not provide any benefit to the insured. He gets tired of paying installments for a long time. Seeing this mentality of people, the insurance company introduced a new type of term insurance plan 'term plan with return of premium' in the market.
What is term plan with return of premium??
The company introduced term plan with return of premium for people who aim to get some benefit in exchange of term plan. In this plan of term insurance, the company gives an option to the insured customer to return the premium amount. As a result, the insured may find the plan beneficial. This premium returning term plan is similar to a normal term insurance plan; But the difference in this plan from the regular plan is 'survival benefit'. The policy holder can get survival benefit through this plan and get back the premium paid by the insured. The amount collected including GST is not refundable under the Installment Refund Scheme. Add on benefits associated with this plan include Disability, Sudden Death Benefit and Critical Illness Protection.
Installment is refundable on maturity
The return of premium term plan is similar to a standard term plan. This plan works like a life insurance policy and provides a death benefit to the policy beneficiary. The special feature of this is maturity benefit. Policyholders can avail term plan with return of premium by paying additional premium. For this plan, you can choose the sum assured yourself and also choose the term of the policy. The premium depends on the tenure you choose and the risk cover. Returns the premium paid by the insured when the policy matures.
Who is the plan useful for?
The nature of financial responsibility may vary from person to person. Lifestyle and income streams may also differ. Any person is content with the present. His expenses continue comfortably and without any difficulty; But he has nothing for the future. Of course, he is worried about the financial future of the family in his absence. A term plan insurance scheme that pays back the premium becomes important for such people. Of course, by now most people have taken a regular term plan. But, with this new option, many people preferred it.
Singles can also take the plan
A term insurance plan that generally repays the premium is suitable for unmarried people. This plan can be good for people nearing retirement but not married. There may be a few reasons for this. An important reason for this is that the person is not married due to the responsibility of the elderly parents. A premium refund plan can be good for such people. A term plan that pays back premiums can be good when a person takes care of elderly parents and is no longer able to bear the expenses over time. Also, if a person is married and has no children and is dependent on his wife's income, the return of premium plan is also good for him. This plan includes life cover. At the same time, the benefit on maturity of the policy eliminates future financial worries.
Benefit on this plan
A person taking a return of premium term plan is not deprived of tax benefits. The tax benefits available to a person taking a normal term insurance policy are also applicable to this plan. The premium paid for the term plan and the risk cover amount are completely tax free. Under the Return of Premium insurance scheme, you can get tax rebate on the premium amount up to one and a half lakhs.
Excess installment amount
As the premium is refundable in this scheme, the premium amount is retained by the insurance companies. Of course, this can balance installments rather than getting tax relief. In this plan, the policyholders are given the freedom to choose the sum assured, term and premium as per their needs. Also, after the policy matures, a lump sum amount is returned. According to this plan you have to pay the premium till age 60 and then you can extend it till age 85.
