Skip to main content

Is Term Insurance with Return of Premium a Better Choice Than a Regular Term Plan in India?



When comparing term insurance with return of premium to a regular term plan, the choice depends on financial priorities. Both plans provide life coverage, but their benefits and cost structures differ. Understanding these differences can help in selecting the most suitable option.

What is Term Insurance with Return of Premium?

A regular term insurance policy offers life cover without any maturity benefits. If the policyholder survives the term, there is no payout. In contrast, a Term Insurance with Return of Premium plan refunds all premiums paid (excluding taxes and rider charges) if the policyholder outlives the policy tenure, providing added financial security.

Key Differences Between TROP and Regular Term Insurance

  1. Premium Costs

    • Return of premium plans have higher premiums than regular term plans because of the refund feature.

    • A regular term plan offers the most affordable way to secure a high coverage amount.

  2. Maturity Benefits

    • A regular term plan provides a payout only in case of the policyholder’s death, with no survival benefits.

    • A return of premium plan ensures that all premiums paid are refunded if the policyholder survives the policy term.

  3. Sum Assured vs Affordability

    • With the same budget, a policyholder can get a higher sum assured in a regular term plan compared to a return of premium plan.

    • Return of premium plans are suited for those who prefer some savings along with insurance coverage.

  4. Flexibility and Liquidity

    • A regular term plan allows for investment savings in other financial instruments, which may yield higher returns.

    • A return of premium plan acts as a disciplined savings mechanism but does not offer liquidity until the policy matures.

  5. Who Should Choose a Return of Premium Plan?

    • Suitable for individuals who want guaranteed maturity benefits and are willing to pay higher premiums.

    • Best for risk-averse investors who prefer insurance with an assured return component.

  6. Who Should Choose a Regular Term Plan?

    • Ideal for those who want maximum life cover at an affordable cost.

    • Suitable for individuals who prefer to invest the savings from lower premiums into other wealth-generating assets.

Which is the Better Choice?

By purchasing term insurance at an early age through the Bajaj Finserv app, individuals can lock in lower premiums, ensure better coverage, and secure their family’s financial future. However, a return of premium plan may appeal to those who want their premiums refunded if they survive the policy term. Evaluating personal financial needs and comparing the benefits of both options can help in making the right decision.

Comments

Post a Comment

Popular posts from this blog

Quick Guide For Zero Depreciation In Car Insurance

Some parts of your car face wear-and-tear faster than the others and these parts are often referred to as depreciated parts. Once you file for an insurance claim, the insurance company deducts a value equal to the depreciated value of all such parts and does not settle your claim in full. The parts that are made up of rubber, plastic, fiber, etc. fall in this category. If you want to avoid this deduction from the final claim amount, you can avail of a zero depreciation car insurance cover. It is also known as nil depreciation cover as it nullifies the deduction from the claim amount due to the deprecated components of your vehicle. The benefits of a zero depreciation car insurance policy are stated below: Comes at a reasonable price  If you have already purchased a comprehensive car insurance policy, you can avail of a zero depreciation car insurance cover at a nominal price. It is because it is an add-on insurance policy that only enhances your claim amount to reduce the part of ...
Post a Comment
Read more

Necessary Information On Hospital Cash Insurance Plan

Medical treatments these days are a matter of the huge amount of money. And if you need quality treatment facility from the super-specialty hospitals and clinics you need a medical insurance plan for you and your family. If you are planning for the medical insurance plan with hospital cash cover , then be sure to consult with the best insurance plan provider.  Let us discuss in details. Financial companies such as reputed NBFC Bajaj Finserv and other insurance companies have their own health insurance policies that range from smaller amounts of bigger amounts. All these medical policies fall under the pocket insurance policy scheme. It gives clients the facility to get benefits with minimum investments. The procedure is quick and does not require lengthy documentation. You can get a higher amount of money with such hospital cash insurance to continue medical treatments even for critical patients. Just make sure you read the policy details clearly before yo...
Post a Comment
Read more

Stay Protected on the Road- Understanding the Importance of acko car insurance

  Having a car insurance policy is essential for every car owner. It not only provides financial protection in case of any damage or loss but also ensures a safer driving experience. Acko is one of the leading car insurance providers in India, offering a wide range of insurance plans to suit the needs of all car owners. In this article, we will be discussing the importance of Acko car insurance in India and how it helps to stay protected on the road. We will also look at the various benefits and features of Acko car insurance policies that make them an ideal choice for car owners. Understanding the Importance of Acko new car insurance in India As the number of vehicles on Indian roads increases, so does the number of accidents and other related incidents. Traffic jams, road rage, and bad driving habits are some of the major causes of accidents. It is important for drivers to stay safe on the road, and to do so, they must have a car insurance policy. Acko new car insurance is one...
4 comments
Read more