Best Term Insurance in India: Why You Should Consider a Term Insurance with Return of Premium

Life is unpredictable, and ensuring financial stability for your family in uncertain times is a top priority for most individuals. This is where term insurance comes into the picture. It provides a robust financial safety net, offering peace of mind that your loved ones will be taken care of even if you’re not around. Amongst the numerous choices available, term insurance with return of premium (TROP) is now highly sought after in recent years. But why is it so? Let’s find out further to understand its nuance and how it may be the best choice for you.

What is Term Insurance?

Before elaborating on the benefits of TROP, let’s first understand what term insurance is. Term insurance is a pure protection plan that provides your loved ones financial protection in case of your untimely demise during the policy period. The only concern is to provide high cover with minimal premium. It is easy, pocket-friendly, and is highly believed to be one of the best term insurance in India.

However, the drawback of traditional term insurance is that it loses if the policyholder lives beyond the duration. Term insurance with a return of premium (TROP) comes in here to plug the lacuna.

What is Term Insurance with Return of Premium (TROP)?

TROP is a kind of term insurance that provides the benefits of a term plan with a savings aspect. It provides life cover for the whole policy term, like ordinary term insurance. The only difference is that when the policyholder survives the policy term, the insurer repays all the received premiums, less taxes and rider fees.

This means that you get financial security for your loved ones as well as the assurance that your money will not go to waste in the event that you outlive the policy term. This twofold benefit makes TROP a viable option for everyone.

Why You Should Choose TROP

Below are some compelling reasons why you should choose a term insurance with return of premium:

1. Financial Security with Additional Savings

TROP provides you with financial protection for your relatives in case you die prematurely. If you live longer than the policy term, you get a refund of all the premiums collected back to your account, and thus it’s a win-win situation. This is a sort of forced plan for savings and ensures that your money is never lost entirely.

2. Great Value for Money

Even though premiums for TROP are slightly higher than usual term insurance, return of premiums on maturity makes it an excellent value-for-money deal. It gives you the benefit of savings as well as insurance without your taking separate investment in another investment product.

3. Disciplined Financial Planning

With TROP, disciplined planning for finances is encouraged. Being invested in periodic premiums means you’re investing in your family’s financial security on a regular basis.

4. Tax Benefits

Just like other term insurance policies, TROP has tax benefits as well. Premiums are exempt from tax under Section 80C of the Income Tax Act and maturity proceeds are exempt from tax under Section 10(10D) subject to specified conditions.

5. Customizable Options

All the insurers offer TROP policies with add-ons like critical illness cover, accidental death benefit, and waiver of premium, so you can get the policy tailored according to your personal needs.

Main Features of TROP Plans

Some of the main features of return of premium term insurance are given below:

• Refund of Premium: The sum of total premiums paid (excluding taxes and rider premiums) is returned when the policy term gets over.
• Flexible Policy Tenures: You have different policy tenures to select from, such as 10, 20, or 30 years, depending on your financial objectives.
• Large Sum Assured Choices: These policies offer a wide range of sum assured options to serve particular purposes.
• Added Coverage: Riders may be availed to enhance the coverage.
• Nominee Benefits: Upon death of the policyholder within the term, the nominee receives the sum assured.

How to Select the Best Term Insurance in India

Selecting the best term insurance in India can be challenging, given the numerous options. The following are some tips to help you make an informed decision:

1. Assess Your Financial Needs

Understand your family’s financial requirements, including daily expenses, future goals such as education or marriage, and outstanding debts. This will help you determine the right sum assured.

2. Compare Premiums

Compare premiums of different TROP plans using computer-based tools. Compare policies providing maximum benefits at affordable prices.

3. Check Claim Settlement Ratio

Select insurers with a high claim settlement ratio (CSR). A high CSR indicates a good settlement record of the insurer.

4. Evaluate Additional Benefits

Consider policies that come with riders for added protection. For instance, a critical illness rider can provide cash in case of a serious illness.

5. Read Policy Terms Carefully

Understand the fine print, including exclusions, premium payment terms, and refund conditions, to be ready later.

Who Should Buy TROP?

TROP is most suitable for individuals who:

• Seek Financial Security through Savings: Those seeking a policy that offers life cover and the return of your money will love TROP.
• Are Risk-Averse: Those who want the surety of returns over placing bets on market-linked insurance plans will be interested in TROP.
• Want Tax Benefits: Tax benefits under the Income Tax Act are available to TROP investors, making the policy a choice for tax-oriented investors.

Conclusion

Return of premium term insurance is an excellent choice for individuals who want the twin advantage of financial security and savings. It gives financial security to your family in the event of your premature death and also returns your premiums if you outlive the policy term. This makes it one of the best term insurance policies in India.

By carefully examining your financial needs and comparing various plans, you can choose a TROP policy that best meets your needs. Remember, insurance is not just protection; it’s peace of mind. So, make an informed decision today and secure your family’s future while securing your savings.