Life is full of uncertainties and risks. We can’t foresee what might happen to us or our dear ones down the road. This is why having term insurance is crucial; it ensures that your family is financially safeguarded if something were to happen to you unexpectedly. However, have you ever wondered what happens if you make it through the insurance period without needing to make a claim? Will you receive any money back from your term plan in such a case? Additionally, what if you were to be diagnosed with a severe illness during the policy’s term? Would your term plan provide any extra benefits?
If you choose a term plan that includes features like the return of premium and critical illness cover, you will find affirmative answers to these questions.
What Is a Term Plan with Return of Premium?
A term plan with return of premium (TROP) is a variant of a term plan that offers maturity benefit along with death benefit. This means that if you outlive the policy term, you will get back all the premiums you have paid towards the plan, excluding taxes and charges. This is an attractive feature for those who want to get some return on their investment in a term plan.
For example, suppose you buy a TROP for 25 years with a sum assured of Rs. 1 crore and an annual premium of Rs 10,000. If you die during the policy term, your nominee will get Rs. 1 crore as a death benefit. But if you survive till the end of the policy term, you will get back Rs. 2.5 lakh as maturity benefit.
What Is a Term Plan with Critical Illness Cover?
A term plan with critical illness cover is a variant of a term plan that offers an additional benefit if you are diagnosed with any of the specified acute illnesses during the policy term. These critical illnesses may include cancer, heart attack, stroke, kidney failure, etc. Depending on the plan, you may get either 100% or a percentage of the sum assured as a critical illness benefit, which is paid over and above the death benefit.
For example, suppose you buy a term plan with critical illness cover for 25 years with a sum assured of Rs. 1 crore and an annual premium of Rs. 15,000. If you die during the policy term, your nominee will get Rs. 1 crore as a death benefit. But if you are diagnosed with cancer during the policy term, you will get Rs. 1 crore as a critical illness benefit, and your policy will continue till maturity.
Can You Get Both Returns of Premium and Critical Illness Coverage in One Term Plan?
Yes, you can get both returns of premium and critical illness coverage in a single-term plan if you opt for a plan that offers both these features. Such a plan will provide you triple benefits: death benefit, maturity benefit, and critical illness benefit. This way, you can secure your life and your savings under one plan.
For example, suppose you buy a term plan with a return of premium and critical illness cover for 25 years with a sum assured of Rs. 1 crore and an annual premium of Rs. 20,000. If you die during the policy term, your nominee will get Rs. 1 crore as a death benefit. If you survive till the end of the policy term, you will get back Rs. 5 lakh (105% of Rs. 4.76 lakh) as a maturity benefit. If you are diagnosed with any critical illness during the policy term, you will get Rs. 1 crore as a critical illness benefit, and your policy will continue till maturity.
How to Choose the Best Term Plan with Return of Premium and Critical Illness Cover?
There are many factors that you should consider while choosing the best term plan with a return of premium and critical illness cover, such as:
- The sum assured should cover your family’s financial needs in case of your death or critical illness. Use the term plan calculator for this.
- The policy term that can cover your working years and retirement age
- The premium amount that is affordable and fits your budget
- The critical illness benefit covers the maximum number of critical illnesses and pays the maximum amount
- The claim settlement ratio and customer service of the insurer can ensure a hassle-free claim process and support
Conclusion
A term plan with a return of premium and critical illness cover is a smart way to protect your life and savings under one plan. It offers you multiple benefits that can help you cope with the uncertainties and risks of life. However, you should carefully read the policy document and understand the terms and conditions before buying such a plan. You should also review your plan periodically and make changes if required to suit your changing life stage and needs.
