Financial security is one of the most important things in life. It gives you peace of mind knowing that you and your loved ones will be able to meet your financial obligations, even in the event of unforeseen circumstances. A TROP plan (term plan with return of premium) can play a vital role in helping you achieve your financial security goals.
A term plan with return of premium (TROP) is a type of life insurance policy that provides financial protection to your loved ones if anything happens to you. It also offers the added benefit of returning all the premiums you have paid if you survive the policy term. So, let’s know how the term plan with the return of premium works.
When you purchase a TROP, you choose a policy term, sum assured, and premium payment frequency. The sum assured is the amount that your loved ones will receive if you pass away during the policy term. The premium is the amount you pay to the insurance company to keep your policy active.
If you pass away during the policy term, your loved ones will receive the sum assured. If you survive the policy term, you will receive all the premiums you have paid back, minus any applicable charges.
A TROP provides financial security to your loved ones if anything unexpected happens to you. It can help them meet their financial obligations, such as paying off debts, covering education expenses, and maintaining their lifestyle.
If you survive the policy term, you will receive all the premiums you have paid back, minus any applicable charges. This means that you can get your investment back, even if you don’t need the life insurance cover.
The premiums you pay towards a TROP are eligible for tax deduction under Section 80C of the Income Tax Act, 1961. This means that you can reduce your taxable income and save tax.
A TROP is a good option for people who are looking for comprehensive financial protection for their loved ones, as well as a return on their investment. It is also a good option for people who have financial obligations, such as debts or loans, that they want to ensure are paid off in the event of their demise.
There are a few essential considerations you should keep in mind before investing in a TROP:
TROP policies are generally more expensive than regular-term insurance plans. This is because they offer the additional benefit of returning your premiums.
It is important to choose a policy term that is aligned with your financial goals and needs. For example, if you have young children, you may want to choose a policy term that covers the period until they reach financial independence.
The sum assured should be sufficient to meet the financial needs of your loved ones if anything unforeseen happens to you. It would help if you considered factors such as your dependents’ monthly expenses, your liabilities, and your future financial goals.
Riders are optional add-ons that you can purchase to enhance the coverage of your TROP. Some common riders include accidental death benefits, critical illness benefits, and waiver of premium riders.
Choosing a reputable insurance company with a good track record of financial stability and claim settlement is important.
A term plan with a return of premium is a good option for people who are looking for comprehensive financial protection for their loved ones, as well as a return on their investment. It is important to consider your financial needs and goals carefully before investing in a TROP plan. You should also compare different plans from different insurance companies to choose the best one for you