- Term plans with return of premium not only provide you with a substantial life insurance cover, but also return the premiums paid towards the policy on completion of policy term
- You can add riders to this policy for enhanced protection.
- Premiums paid during policy term and premium returned at the end of policy term are exempt from tax as per prevailing tax laws.
30-year-old Harshit was keen on taking a term insurance plan but the fact that he would not get any money back in case nothing happened to him during the policy term, made him a little disappointed. For this reason, he postponed his decision to buy a term insurance plan.
Harshit can choose Term Insurance plans that return the premium:
A pure term insurance plan is the simplest form of life insurance. It provides sum assured to the family in case of demise of the policyholder. Term insurance plans provide substantial life insurance cover at an affordable premium. You get peace of mind knowing that your family has the financial cushion to fall back on in your absence. However, many people seek to get back all, or some of the money paid as premium during the policy term in case nothing happens to them.
Many people do not know that there are certain term plans that return the premiums paid at the end of the policy period. These are typically referred to as Term Insurance with Return of Premium Plans.
For better understanding let’s take an example. Lets assume you take a term insurance with return of premium plan for a sum assured of ₹50 lakhs with a policy term of 20 years by paying an annual premium of ₹10,000. On completion of policy term, all the premiums paid by you, ₹2 lakh in this case, would be returned to you. In case of an unfortunate incident during policy term, your family will get the sum assured of ₹50 lakhs.
Term Plans Customizable with Riders to Suit Specific Needs
You can add benefits to your plan by adding riders to it. Adding riders is a cost-effective way to customize your life insurance policy. The common riders available are:
- Critical Illness Rider: This rider provides cover against major critical illnesses. You get a lump-sum amount if affected with any of the covered illness.
- Term Rider: This rider can help increase the sum assured of existing policy.
- Accidental Death/Permanent Disability Benefit Rider: This rider provides financial support in case of accidental death, disability as well as dismemberment by paying additional sum assured to the policyholder.
With the help of these riders, you can cover specific additional risks that might not be offered under standard life insurance policy.
The Bottom-Line
Giving you the dual benefit of life insurance cover and return of premium at the end of policy term, these plans are suitable if you want more than just life cover. Additionally, the premiums paid during the policy term and the premiums returned at the end of policy term are tax free as per prevailing tax laws.
Exide Life Smart Term Plan is a term insurance with return of premium plan that offers you guaranteed return of premium at the end of policy term. This policy offers you three options to choose the amount of premium you want to get back:
Classic:
Offers life insurance cover and returns 100% of premium paid at the end of policy term
Step-up:
Offers life insurance cover and returns up to 150% of the premium paid, at the end of policy term
Comprehensive:
Here you get a substantial life insurance cover and a part of the premium paid is returned at the end of policy term
Know more about the plan here.
