Pure Term Insurance Vs Return of Premium Vs Permanent Life Insurance

To secure yourself and your dependent family, insurance policy is a necessity. An insurance cover provides a financial cushion to your loved ones by offering the beneficiary sum assured in case of your absence and other benefits. The policy keeps your family safe from any financial trouble and helps to maintain the same lifestyle.When it comes to choosing one amongst the three policies, you will need to compare Term Insurance Vs Return of Premium Vs Permanent life insurance plans . If you're contemplating between the three insurance plans, you need to assess the policies on various parameters.

• Pure term insurance offers compensation to the beneficiary of the deceased policyholder, and there is no benefit if the insured person survives through the term. Term Insurance with Return of Premium option is a variant of the term insurance plan that offers survival benefit if the policyholder survives until the policy maturity. Along with this, it also considers death benefit, a major trait of a Pure Term Insurance policy. On the other hand, Permanent Life Insurance provides lifetime coverage to the policyholder with death benefit and a savings component.
• In terms of premium cost, the Pure Term Insurance plan is cost-effective. A Return of Premium plan has a high premium rate. A Permanent Life Insurance policy has a fixed rate of premiums, a policyholder needs to pay throughout his/her life. The premium of Permanent Life Insurance is more costly as compared to the Pure Term Insurance policy.
• Permanent Life Insurance protects the insured person until death. In the case of Pure Term Insurance and Return of Premium Plan, both policies operate for a specific term period, which could range for a period of 10, 15, 20, or 30 years.
• Pure Term Insurance is best suitable for individuals who want to protect their families financially. The Return of Premium policy is ideal for individuals who seek returns along with the coverage. Permanent Life Insurance is suitable for all individuals – single married or married and have kids.

Whether you choose Pure Term Insurance or Return of Premium or Permanent Life Insurance , all three policies have their benefits. It is always necessary that you assess your coverage needs and select a plan that suits your budget.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.