Why Should you Choose a Term Plan with Return of Premium Option?

We all wish to live a happy and healthy life. As a family, you make certain lifestyle choices such as doing daily exercise and following a proper diet to stay fit and healthy. While we put our efforts into ensuring our own well-being, there will be certain situations in life for which you need to be prepared.Along with your physical and mental fitness, financial well-being is of utmost importance. Imagine being in a situation where you're the only sole earner in the family, and you die due to unexpected circumstances. How will your family cope with the sudden loss? Moreover, will they be able to afford the kind of lifestyle post your demise? Buying a term insurance cover fades away all the worries.The term insurance policy is an agreement between the insurer and the policyholder. The insurance company compensates to the nominee of the family in case of the policyholder's death. However, the plan does not offer any financial help if the policyholder survives through the term. In contrast, there is ample possibility that the policyholder may survive even after the policy matures. For this reason, you should consider buying Term Insurance with Return of Premium.

• TROP offers the combined benefit of insurance cover and return of premium in case of survival of the policyholder
• Once the policy reaches maturity, you are guaranteed to receive an assured refund of premiums you have paid throughout the policy's tenure.
• Under the plan, you benefit from adding rider options to enhance the coverage of the policy. These riders include personal accident cover, physical disability, waiver of premium benefit, and critical illness cover. It is better to choose the riders at the time of buying the policy as the additional costs of including the benefits is low.
• You can avail of tax benefits for the premiums paid and the amount drawn from the policy. You can claim tax deductions under Section 80C and Section 10 (10D) of the IT act.
• Overall, term insurance with return of premium option can be purchased by all individuals – whether single, married with no kids or those who have kids.
• If you are ready to pay a high premium and want to gain returns and insurance coverage, you should opt for the plan.

Term insurance is the most preferred insurance cover as it offers financial security at the lowest possible premium rate. You cannot ignore the fact that it offers no maturity benefits, but you can ensure cash on that benefit if you opt for term insurance with return of premium.

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.