Is TROP An Investment Worth Having?

11 min read
Is TROP An Investment Worth Having

TROP – Term with Return of Premium: How can you ever put a price tag on your family’s safety and security? It is the ultimate goal, and everything you have worked towards is aimed at achieving that objective. As much as you would want to spend a lifetime watching your kids grow and family prosper, you can never honestly know what life has in store for you.

Can you risk derailing their future due to a lack of planning? It is safe to assume that the answer is no.

Therefore, the importance of life term insurance, especially TROP or term insurance with return of premium in your financial portfolio, cannot be overlooked. It is time you consider term insurance with return of premium plan, a little more than a tax saving instrument.

With a steady rise in inflation and your standard of living, it is essential to build a solid financial foundation complete with the best term insurance plan. The insurance coverage will protect your family during uncertain times by taking care of their needs and also double up as a tax saving investment for your portfolio.

Is TROP An Investment Worth Having

The most common protection product that fits the bill ideally is a pure life term insurance with return of premium plan that comes with maximum coverage at a low premium. This tax-saving insurance plan can work wonders in securing your family’s future against any eventuality. Several standalone term plans offer significant death benefits, tax-saving benefits, and rider options to enhance the scope of your life term insurance.

However, what happens when you outlive the policy term? While a pure life term insurance plan cover ceases with no maturity pay-outs, having term insurance with return of premium allows you to earn quantifiable maturity returns on your investment, apart from tax saving, as you receive the total amount of annualized premiums paid upon surviving the policy tenure.

What is a Term Insurance with Return on Premium Policy?

Life term insurance with return of premium plan is a unique product that gives you all the tax-saving benefits of term insurance with an added survival benefit in the end.

Is TROP An Investment Worth Having

Similar to a whole life insurance plan,  a term plan offers tax-saving benefits under Income Tax section 80C during your policy term. The difference between term plan and whole life plan, however, is that the maturity benefit under the term insurance plan comprises of the total amount of annualized premium, with no added interest. In other words, term insurance with return of premium plan will return the total amount of premiums that you have paid towards the plan upon maturity of the policy.

At the same time, should something happen to you, the death benefit from the term insurance with return of premium policy will ensure that your family’s financial needs are taken care of.

Importance of Having a Term Plan in Your Portfolio

Planning your future is one of the most important decisions you will make in your lifetime. Knowing that your loved ones are in safe hands in the event of misfortune will help you make better decisions about their future. By investing in the best term insurance plan, it is a win for you and your family, whether or not you survive until your policy maturity.

Is TROP An Investment Worth Having

Top Reasons to Buy a Term Insurance with Return of Premium Plan

  • Financial security for your loved ones

One of the main reasons why you must consider term insurance with return of premium plan is the guaranteed protection of your family’s financial future in your absence. The assured death benefit to the nominee will help them get on with their lives once the initial shock and grief of your loss wears off, and the practicality of life sets in. The tax saving sum assured will be disbursed as soon as the nominee files for a claim.

  • Protection against life-threatening ailments

You can further protect yourself against the ever-present risk of lifestyle disorders. A small payment towards critical illness rider will give you the peace of mind that your medical expenses will be covered if you are diagnosed with a life-threatening disease.

  • Maturity benefits to support your retirement

As a guaranteed return-based investment, the return on premium term plan offers non-risk benefits at the end of the policy term. You can reward your long and Healthy life with a maturity benefit that will be paid to you at the end of your term if you survive the policy term.

  • Comprehensive tax-saving benefits

The tax-saving benefits of return with premium term plan are one of the biggest draws. All the premiums paid towards your term insurance are tax-saving because they are eligible for deduction benefits as per Income Tax section 80C. Even the maturity or death benefit pay-outs are exempted from being taxed as per Income Tax section 10(10D).

Is TROP An Investment Worth Having

  • Peace of mind

There is nothing like a stress-free, tax saving investment that cares for your family in your absence. However, what happens if you miss a few premium payments? Don’t worry, because the term plan with return on premium has you covered. If, for some reason, you are unable to pay towards your premiums, your coverage does not cease immediately. Instead, the death benefit is recalculated to match the premiums paid by continuing the cover until the end of your policy tenure. In some cases, insurers may even pay you back your premiums after charging a small fee in case of policy discontinuance.

Give yourself the ultimate tax-saving benefit and your loved ones the financial security of a comprehensive life insurance cover that is designed to protect you through your lifetime and beyond.

Insurers, like Max Life, offers comprehensive term insurance with return of premium plans for significant tax-saving and guaranteed financial assistance for your family.

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