
Term insurance with 100% refund of premium at NO COST is a new type of term plans in which the policyholder has choice to exit the term plan at any time and get all the premium amount back that he has paid minus the GST. In simple words, a 100% refund of premium term plan comes at the cost of a regular term plan (No extra costs) and allows exiting the plan early (if the policyholder wishes to) and get a refund of all the premium they had paid. All this can be done with no extra cost.
Zero Cost Term Plans
Zero Cost term plans are a new type of term insurance plans that offer a refund of the premium paid on maturity as a survival benefit. Unlike regular term insurance plans, where you don’t get back the premium amount paid on maturity, zero cost term plans provide this additional benefit, with no additional cost.
Term Plans with Return of Premium (TROP)
TROP is a type of term insurance plan that offers a refund of the premiums paid to the company if the policyholder(customer) survives the policy term. This means that if the policyholder outlives the policy term, they will receive a refund of the premiums paid, removing GST. Some companies, such as Tata AIA and Max Life Insurance, offers’ term plans with a return of premium feature.
Death Benefit
In addition to the refund of premium on maturity, these term insurance plans can also provide a death benefit to the nominee in case of the policyholder’s accidental death during the policy term. The death benefit is usually a total sum amount that can help provide financial security to the customer’s family.
Flexibility
Term insurance plans with refund of money feature generally offer flexibility in premium payment options. Customers may have the choice to pay premiums on an annual, semi-annual, quarterly, or monthly basis, depending on the choice or capabilities.
Coverage Amount
The coverage amount, also known as the sum assured, is the maximum amount that the insurance company will pay out if you claim. Term insurance plans with a refund of premium feature generally offer a large range of coverage amounts to choose from, which allow customers to select a coverage amount that suits their financial needs.
Tax Benefits
Like other term insurance plans, these plans also offer tax benefits under the prevailing tax laws. Premiums paid towards these plans are eligible for tax deductions under Section 80C of the Income Tax Act, and the death benefit received by the nominee is usually tax-free under Section 10(10D) of the Income Tax Act.
Policy Term
The policy term can be defined as duration for which the term insurance plan provides coverage. These plans typically offer a huge range of policy terms, which allow customers to choose the term with their financial needs.