3 Types of People for Whom a Term Plan with Return of Premium Makes Sense

In India, most investors are averse to market-related investment risks, i.e. they want their investments to continue providing sustainable returns over the long term. Earlier, such investors believed term insurance plans to be a high-risk investment, despite the low premiums and significant insurance coverage benefits, simply because these plans did not offer any returns after the completion of the investment period.

With TROP; however, risk-averse investors will not only avail investment benefits including substantial tax deductions and guaranteed financial security for their families but also receive additional coverage benefits such as critical illness cover . Thus, risk-averse investors can avail 360-degree insurance coverage protection against medical emergencies, life-threatening ailments, and any eventuality.

Traditionally, term plans have not been a popular choice of investment among young investors, simply because most professionals in their 20s and 30s are inclined towards investing towards wealth creation instruments that offer significant capital appreciation. Against investment opportunities such as savings plans, ULIPs, and mutual funds, young investors do not consider term insurance as a possible opportunity.

While term insurance predominantly functions as a contingency plan, the Term plan with return of premium insurance plans goes a step further in making them an attractive investment, by offering features such as increasing cover benefits upon reaching essential life stages in life. You may invest in a Term plan with return of premium option initially for contingency planning and avail tax savings. This way, Term plan with return of premium helps ensure that you remain protected during most of your working years while making sure that your insurance coverage remains relevant throughout your life.

Being a married individual, you may feel the responsibilities growing upon you. After your child comes into the world; however, these responsibilities suddenly grow manifolds, as you are entrusted with the job of nurturing a newborn, take care of their daily needs while ensuring that your child has the best possible upbringing and education.

As children grow, their needs evolve, and as a parent, you need to make sure that your child doesn’t have to compromise on their aspirations because you are not there to look after them. Investing in a TROP helps you make sure that your child’s future is financially secure, even if something happens to you and you are not able to provide for them. Also if you suffer a loss of income due to any life-threatening ailment or accidental injury, your term plan will help ensure that you and your family have enough funds to take care of your medical treatment expenses, the daily lifestyle expenses, and future goals.

Term insurance plans, especially TROP (term plan with return of premium option) not only help protect your loved ones from any unplanned financial crisis, in your absence but also help make sure that you have a substantial amount of money in your hand, after surviving the insurance coverage tenure.

Disclaimer: Return of premium option is available on payment of additional premium