Why Buying Term Plans with Return of Premium makes sense

Life is unpredictable. An emergency can strike any time without warning, often leaving individuals and families in a financial lurch. Just take the COVID-19 crisis, for instance, which has caused hardship for so many people across the world -- people who were just leading their normal lives, earning an income for the future of their families, before the pandemic struck. And just like that, it was all over; they were gone leaving their families to fend for themselves. That is unless they had secured their families’ future by opting for a life insurance policy. There is no disputing the fact that the demise of a family member does not just have an emotional impact on other members, but also triggers financial insecurities. Accordingly, it is crucial to be prepared for such events. A term life insurance policy in such situations can come to the rescue as it can help pay for the financial goals of the family.

What is term insurance?

A term plan is the kind of insurance that pays lump-sum financial benefits to the family of the policyholder in case the latter dies during the policy term. It is for the policyholder to decide the payout amount that would be paid to his/her nominee(s) after death. All that the policyholder has to do is pay a premium as per the policy terms, which can be monthly, quarterly, or yearly, as per the policy terms and conditions.  

What such a policy ensures is that the financial future of the policyholder’s family is secured and they can go on to achieve their important future milestones — like the children’s education, their marriage, etc. — without worrying about money. Term plans are one of the preferred instruments because they offer a large sum assured for a minimal annual premium. For instance, if you go with Bajaj Allianz Life Smart Protect Goal - A Non-Linked, Non-Participating, Pure Life Term Insurance Plan when you are 25 years old, you can get a Rs 1 crore cover for premium of only Rs 21 per day*.

Return of Premium Benefit

Some leading insurance companies now offer a Return of Premium benefit with some of their term plans. Under this benefit, you get back the amount paid as maturity benefit, if you survive the policy term subject to the terms and conditions of the policy. This becomes a win-win situation for you and your family because either they would receive the insurance money, or you would get the premium back (subject to deduction of applicable taxes).

Let’s assume a person buys a Term Plan with Return of Premium option with a life cover of Rs 1 crore for a 30-year policy term, and pays Rs 10,000 annual premium (plus taxes) for 30 years. If the policyholder passes away during this policy term of 30 years and provided all due premiums are paid, the life cover amount of Rs 1 crore will be paid to the nominees. However, if the policyholder lives till the end of the 30-year policy term, he/she will get back the entire premium amount paid, that is Rs 3 lakh subject to the terms and conditions of the policy.

This is a great option, especially for young professionals in their 20s and 30s. This way, you know your future, and that of your family’s, is secured one way or another.

Getting the suitable term insurance plan

If you are looking for a term insurance plan that suits your needs, look no further than Bajaj Allianz Life Insurance, which provides a sufficient cover at affordable premiums. Bajaj Allianz Life Smart Protect Goal – A non-linked non-participating, pure term insurance plan also comes with the option of Return of Premium benefit#. Moreover, you get the choice of a range of additional or add-on covers that you can use to customise your life insurance plan at nominal extra cost. You may opt for add-on covers like waiver of premium, accidental death or accidental total permanent disability. Moreover, its Critical Illness Rider covers 55 listed illnesses#. The best part is that if you buy the Bajaj Allianz Life Smart Protect Goal – A non-linked non-participating, pure term insurance plan online from Bajaj Allianz Life Insurance website, you get a 3 per cent discount on premium$.

You can also use the online Term Insurance Premium Calculator on the Bajaj Allianz website to calculate the premium you need to pay to the insurer for the desired amount of insurance coverage. It also helps you get an estimate of the tenure of coverage you may need to protect the financial interests of your loved ones.

Term insurance plans, especially with the return of premium option, not only help protect your loved ones from any unanticipated financial crisis, but they also help make sure that you have a lump-sum amount of money in your hands after surviving the coverage tenure. And, by choosing a trusted insurance partner like Bajaj Allianz Life Insurance, you can look forward to get your life goals done.

References:
* Above illustration is considering Male aged 25 years | Non-Smoker | Life Cover Variant | Policy term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Non-medical rates | Annual Premium Payment Mode | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only.
# Product feature/benefit mentioned above are dependent on variant
$ 3% Discount is available for regular premium and limited premium payment frequency under all variants of Bajaj Allianz Life Smart Protect Goal - A Non Linked, Non-Participating, Pure Life Term Insurance Plan

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Disclaimer: No Deccan Chronicle journalist was involved in creating this content. The group also takes no responsibility for this content.