When the business of insuring people first came up, all plans were purely on term basis. You pay to cover you for the term you chose and in case any thing happens in between, you get the Sum Assured. In case you survive till the end of the term, you get nothing. Later, insurance products have evolved greatly providing returns to policy holders even if they stay alive at the end of the policy term.
You might not be aware that there are term plans which also return your premium in case the life assured stay live through the term chosen. Obviously, while the premiums for pure term plans are the lowest compared to any other insurance plan, the premium for term plans with ‘return of premium’ are on the higher side.
For example, let’s see the premium sample for a 30 year old, 15 year term and 50 lacs Sum assured.
If you don’t need return of premium, Aviva can provide you iLife term plan with annual premium of Rs.4526. And if you need ‘return of premium’, you are looking at Aviva LifeShield Advantage plan with a premium of Rs.20309 per year.
Similarly, there are other Insurers that offer term plans with return of Premium (RoP). For the subject we took above, the premiums (annual) required by various companies are as follows:
MetLife Met Suraksha TROP: Rs.29398
IDBI Federal Level cover with RoP: Rs.34043
ING Term Life Plus: Rs.39760
Birla Sun Life Premium back term plan: Rs.54152
Reliance Special term plan: Rs.55062
ICICI Pru Life Guard with RoP: Rs.76486