Term Plan with Premium Return

Term Plan with Premium Return :

Some of the people think that they will never utilized the Death Benefit of Term Plan as they will live long beyond the policy term, and their premiums will be wasted as paid for Term Plan.

As insurer, we (the insurer) respect the thinking of that type of people and have designed a unique Term Insurance Plan with respecting their point of view regarding the wastage of Premium paid amount.

Term Plan with the Premium Return is Protection Plan with non-linked and non-participating feature. In this Protection Plan, Death Benefit is as in Term Plan with almost same terms and conditions of the Term Plan. If Insured expired within the policy term the death benefit will be paid as claim to his/her nominee.

If there is survival of insured beyond the Policy Term (Maturity), then your premiums will never lost, as premiums lost in the Term Plan, the insured will get back all premiums which he/she had paid during the Premium Payment Terms (PPT). There will not be any type of bonus paid to insured person as it’s non-linked and non-participating product of Life Insurance.

In this type of product, Term Plan with Premium Return, Insured get back only total of Modal Premiums which he/she has paid to insured (Insurance Company). Modal Premium is the pure Premium, there is neither GST included nor Rider charge included, if you had taken any rider along with the main policy, insured just receive his premium back from insurer.

There, insured can opt policy term as per his/her choice like 20 years / 25 years / 30 years. And the Premium Payment Terms will be limited, there is no need to pay premium for entire policy term as insured pays in Traditional Term Plans normally.

Why should opt for Term Plan with Premium Return instead of Term Plan:

  1. All premiums will be paid back to insured at the completion of Policy Term as Survival Benefit. In Traditional Term Plan, there do not Survival Benefit.
  2. You have to pay premium only for limited period (pay for just 11 years and can enjoy Life Cover for 20/25/30 years as you chosen) but in Traditional Term Plan you have to pay till Policy Term.
  3. There is option to increase sum assured by 5% every year to beat the inflation.

Double Tax Benefit:

There you will enjoy double tax benefit under section 80C and under section 10(10D) of the Income Tax Act.

Criteria to get the Plan:

  1. You should be Income Tax Payer with valid ITR.
  2. Age should be above 18 years
  3. You should be medically healthy, as medical test will be there before initiation of the policy.
  4. Sum-assured will be as per the ITR of the person.

Limitations of the Term Plan with Premium Return:

  1. Premiums are very high in comparison to Traditional Term Plans.

There is only one limitation, it’s the ultimate product to cover life of yourself with the benefit of Survival Benefit, you will never get survival benefit under any Term Plan.

Amit Saxena

Financial & Insurance Consultant
MaxLife Insurance Co Ltd & MaxBupa Health Insurance

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