Life’s security is often a discussed topic given today’s uncertainties, whether related to one’s financial position or not. Consequently, many individuals have started opting for insurance plans as a means to ensure a safety net for their loved ones. Moreover, a recent government study by the IRDAI, Insurance Regulatory and Development Authority of India, outlines that within this decade, India’s insurance market will flourish.
It is projected to outgrow the market of many big nations to have the sixth-largest insurance market. Now, you must be wondering why this is so, and a clear answer is the offerings of an insurance plan. Let us understand how term insurance with a return of premium can bring extensive benefits to your table.
Understanding What’s Term Insurance with a Return of Premium
Term insurance is considered to be one of the simplest ways to get insured and ensure the financial backing of your loved ones. Alongside building a pool of funds for unfortunate situations like a policyholder’s unexpected demise, critical or terminal illness diagnosis, etc., it helps save tax.
In addition to these features, a term plan also has rider benefits, like premium waiver, critical illness benefit, health plan, return of premium, etc. Term insurance with a return of premium ensures the maximum financial benefit of the policy. As soon as the policy term is over, you get the premiums paid back. Now, let’s see what are its benefits.
Advantages of Having Term Insurance With a Return of Premium
Term insurance, as you know, holds two-fold benefits. However, if you decide to leverage additional benefits by opting for riders, especially return of premium, here’s what you’ll get:
1. Guaranteed Returns
One of the standout benefits of term insurance with a return of premium is the guaranteed return of all the premiums paid. This is generally provided when you complete the policy term. It brings a sense of assurance, eventually portraying this plan as a win-win situation. At the same time, you ensure your family’s financial protection and guarantee returns, depending on the case.
2. Tax Benefits
All insurance plans come with attractive tax benefits. They can be availed as per the given provisions under the Income Tax Act. For the payable premiums, the policy is eligible for deductions under Section 80C. This deduction is capped at the limit of ₹1.5 lakh per financial year.
Another significant tax benefit that you may get here is on the maturity proceeds or the death benefit. While this is for cases of unexpected misfortune, the assured sum given to the beneficiaries is exempt from tax under Section 10(10D). This dual tax benefit makes term insurance with a return of premium a tax-efficient investment.
3. Affordability
Term insurance plans, including those with a return-of-premium option, are generally more affordable than other types of life insurance policies. This affordability ensures that you can avail yourself of comprehensive coverage without straining your finances. It allows you to allocate funds to other important financial goals while still ensuring adequate protection.
4. Flexibility Policy Terms
Term insurance with a return of premium is a customizable plan. Alongside adding rider benefits, you can also leverage its flexibility feature. Here, you’ll have the option to select a suitable policy term and premium payment structure.
Choose which policy term aligns with your financial goals and life stage. Since this is such an important aspect of anyone’s life, you must opt for an adequate coverage amount.
5. More Rider Benefits to Choose From
Every insurance plan you discover will have a different coverage scope and unique benefits. Term insurance with a return of premium from trusted providers may offer you other optional riders to add to your base plan. They will simply enhance the coverage of your policy.
The rider benefits cover critical illness, accidental death benefit, and waiver of premium. What’s even more interesting is that you can add them for nominal charges, making it a cost-effective plan. These riders provide additional protection against unforeseen events, ensuring comprehensive coverage.
6. Easy to Understand and Manage
While many of you may think that adding an element to your existing term plan may make it tricky to manage, well, it’s not. Yes, having term insurance with a return of premium is as easy as a regular term plan.
The return of premium features adds extra value to these plans, enhancing their simplicity and making it easier for policyholders to access additional benefits under a single policy. As a Claims Assessor, it’s important to recognize how this feature allows for hassle-free management and tracking of insurance coverage.
With this added benefit, policyholders can plan their finances with greater clarity and confidence, knowing that their coverage is both comprehensive and easily manageable.
7. No Financial Loss
One of the common concerns with traditional term insurance is the potential financial loss if the policyholder survives the policy term. The return of premium option mitigates this concern by ensuring that the premiums paid are returned. This feature makes the term plan a more attractive proposition as it guarantees no financial loss, regardless of the outcome.
Get Insured Under the Best Term Insurance Plan
Do you know what makes any term plan the best? Well, it is the features of that plan. While traditional term insurance may be a budget-friendly and straightforward option to opt for, its additional benefits will only improve it. Term insurance with a return of premium gives you back the full amount of premium upon the policy’s successful completion.
Nevertheless, the insurance company you purchase from has an impactful role in providing you with the best term plan. Insurance providers like Tata AIA provide you with the best of services available. Their CSR, claim settlement ratio, recorded as 99.01% in FY 22 – 23, makes them a reliable insurer to proceed with.
Visit their official website to ensure complete financial backing for your loved ones, and get insured today!
