Is return of premium life insurance worth it?
Owing to customer-engagement and innovative modes of insurance, these days various insurance providers offer a return-of-premium option with the traditional term insurance plans. The plans that come with these options usually charge a higher rate of premium than the traditional term insurance plans. In simple language, return of premium option entitles the policy holder to receive the entire amount that she/he has paid as premiums during the term of the policy, upon maturity of the policy term. This means that the premiums paid by the policy holder are paid back by the insurance provider to the policy holder, in the event of policy holder's survival of the plan term. Needless to say that such an option may sound to be completely beneficial over a period of time. There are added features as well. A return of premium or ROP term insurance plan functions as an investment of sorts. This is because the returns are guaranteed after the plan maturity and thus, the invested amount can be treated as a return.
A general ROP term plan may seem to be a guaranteed-return based plan depending on the risk-appetite of the policy holder. The factor of risk counts because, unlike investment in any market-linked instrument or fund option, an ROP term insurance offers non-risk evaluated benefits that are guaranteed. This makes the ROP an ideal option for those who wish to have decided and pre-fixed benefits in return of a higher amount of monthly or periodic premiums. It must be kept in mind however, that the payable premiums have a direct impact on your pocket and therefore, an ROP term plan must be chosen only in case if the higher premiums suit your requirements.
HDFC Life offers various term insurance plans that seek to secure your finances in the event of any unforeseen circumstances and are meant for your total financial security at all times. For details, click on the mentioned link: https://www.hdfclife.com/term-insurance-plans.
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