Term insurance is a vital component of financial planning, offering individuals and their families financial protection in the event of the policyholder’s untimely demise. In India, term insurance plans with a return of premium (TROP) have gained popularity in recent years. Unlike traditional term insurance policies where the premiums are not returned, TROP plans guarantee a refund of the total premiums paid by the policyholder at the end of the policy term, provided that they survive the term.
This feature makes TROP policies an attractive option for risk-averse individuals who seek protection and savings combined. In this article, we will explore the best term insurance plans with a return of premium in India, considering their key features, benefits, and factors to consider while choosing the most suitable plan.
Best Term Insurance Plan With Return of Premium in India
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Understanding Term Insurance with Return of Premium (TROP)
Term insurance with a return of premium is a hybrid insurance product that combines the benefits of a traditional term insurance plan and a savings plan. The primary goal of TROP is to provide life coverage for a specified term and ensure that the premiums paid are returned to the policyholder upon survival at the end of the policy tenure. If the policyholder passes away during the policy term, the sum assured is paid to the nominee, just like regular term insurance.
Key Features of Term Insurance with Return of Premium
a. Death Benefit: In the event of the policyholder’s demise during the policy term, the sum assured is paid to the nominee. This financial payout provides the family with financial security and helps them maintain their lifestyle.
b. Survival Benefit: One of the primary advantages of TROP is the return of all premiums paid if the policyholder survives the policy term. This feature acts as a savings component, making TROP plans an attractive option for risk-averse individuals.
c. Policy Term: The policy term for TROP plans can vary from 10 to 30 years, depending on the insurance provider. Individuals can select a term based on their financial goals and family’s needs.
d. Premium Payment: TROP plans typically offer regular premium payment options, i.e., monthly, quarterly, half-yearly, or annually. Some insurance companies also provide limited premium payment options, which allow the policyholder to pay premiums for a specific period.
e. Riders and Add-Ons: Insurance companies offer various riders and add-ons that can be attached to the base TROP policy. These riders enhance the coverage and can be chosen as per the policyholder’s requirements.
Best Term Insurance Plans with Return of Premium in India
a. LIC New Jeevan Anand:
Life Insurance Corporation (LIC) of India’s New Jeevan Anand is a popular TROP plan that offers comprehensive coverage and attractive features. It provides life coverage up to the age of 100 and includes a bonus component that boosts the maturity corpus. The plan also allows the option to receive the maturity benefit in installments, which can be beneficial for financial planning.
b. HDFC Life Click 2 Protect Plus:
HDFC Life Click 2 Protect Plus is a feature-rich TROP plan with flexible options for coverage and premium payment. It offers additional riders like critical illness and disability benefit riders, enhancing the overall protection of the policyholder and their family.
c. Max Life Return of Premium Term Plan:
The Max Life Return of Premium Term Plan is known for its competitive premium rates and comprehensive coverage. The plan offers a lump-sum maturity benefit equal to all the premiums paid if the policyholder survives the policy term. Additionally, policyholders can opt for additional riders such as a waiver of premium rider.
d. SBI Life eShield:
SBI Life eShield is an affordable and straightforward TROP plan that provides high coverage at low premiums. The plan offers flexibility in choosing the policy term, premium payment frequency, and various rider options to enhance the policyholder’s protection.
e. ICICI Pru iProtect Smart:
ICICI Pru iProtect Smart is a popular TROP plan that offers extensive customization options. Policyholders can choose from various payout options like lump-sum, monthly, or increasing income. The plan also provides coverage against critical illnesses and accidental death benefit riders.
Factors to Consider While Choosing the Best TROP Plan
a. Coverage Amount: Assess your family’s financial needs and opt for a coverage amount that adequately protects them in your absence. A higher sum assured will provide greater financial security to your loved ones.
b. Policy Term: Select a policy term that aligns with your financial goals and ensures coverage during the crucial years when your family is financially dependent on you.
c. Premium Amount: Compare premium rates from different insurers and choose a plan that offers comprehensive coverage at affordable premium rates.
d. Claim Settlement Ratio: Research the claim settlement ratio of insurance providers to understand their track record in settling claims efficiently.
e. Riders and Add-Ons: Evaluate the additional riders and add-ons offered by insurers to customize your TROP policy as per your specific needs.
f. Policy Exclusions: Familiarize yourself with the policy’s exclusions to avoid any surprises during the claim settlement process.
Conclusion:
Term insurance with return of premium plans provides a compelling blend of life coverage and savings, making them a popular choice among risk-averse individuals in India. While selecting the best TROP plan, consider factors such as coverage amount, policy term, premium amount, riders, and claim settlement ratio. Always compare multiple insurance providers to make an informed decision and ensure that your family receives the financial protection they deserve. Remember, a well-chosen term insurance plan with return of premium can offer peace of mind and secure your family’s future even in your absence.