• Term Insurance Plans with Maturity Benefits – What you need to know

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    Life Insurance
    • Reduce taxable income by up to Rs. 1,50,000 deduction under section 80C**
    • Convenient payment options - annual, half-yearly, quarterly or monthly premium payments
    • Do more with plans that offer pure protection, retirement planning and investment options

    Term insurance policies are protection-oriented plans that offer a risk cover against death to the life assured. This ensures that the life assured’s family is financially protected against untimely eventualities.

    While most term insurance policies only offer a payout to the nominee if the policyholder succumbs to an untimely death during the policy tenure, certain term life plans called TROP (Term Return of Premium) plans come with a ‘return of premium’ feature, wherein all the premiums paid during the policy tenure will be returned to the policyholder at maturity of the policy.

    Thus, these policies provide returns as well as a comprehensive coverage. Purchasing a TROP plan is ideal for those individuals looking for a savings-cum-protection instrument since this lump sum amount can help one meet key financial goals in one’s life. However, in order to avail the maturity benefit, the policyholder will need to keep the policy active by paying all due premiums as per the premium payment schedule.

    Benefits of TROP Plans

    • Death Benefit: Term insurance plans, being protection-oriented instruments, offer a death benefit to the nominee in case the policyholder meets with an untimely death while the policy is in force.
    • Maturity Benefit: While most term insurance policies do not offer maturity benefits to the policyholder, TROP plans return all premiums paid during the policy tenure to the life assured at maturity of the policy.
    • Tax Benefits: Term insurance plans also offer tax benefits to policyholders. Thus, the policyholder can claim tax benefits for premiums paid under Section 80C of the Income Tax Act. Similarly, payouts received through the policy are also eligible for tax exemptions as per Section 10(10D) of the Income Tax Act.
    • Additional Benefits: Almost all life insurance companies offer riders along with base policies. Thus, as a policy buyer, you can purchase additional riders if you wish to receive a more enhanced coverage.
    • Affordable Pricing: Since term insurance plans don’t acquire a cash value, these policies are usually less expensive than other life insurance products.
    • Flexible Policy Tenure: Term insurance plans usually come with a policy tenure ranging between 5 years and 30 years. As a prospective policy buyer, you can, thus, choose a policy tenure as per your coverage needs.

    Term Insurance Plans with Maturity Benefits in India

    Listed below are certain term life insurance plans with return of premium benefits that are offered in India.

    *Note: This is not an exhaustive list.

    1. Max Life Premium Return Protection Plan: The Premium Return Protection Plan from Max Life is a term insurance policy that offers comprehensive coverage to the policyholder and also provides returns at maturity of the policy. The features of this policy are listed below:

    • This is a limited premium payment plan. Thus, policyholders need to only pay the due premiums for a period of 11 years.
    • Policy buyers can choose a protection period of 20 years, 25 years, or 30 years.
    • In order to purchase this policy, the policy buyer needs to be over 21 years of age. The maximum maturity age is 75 years.
    • The minimum annual premium payable for this policy is Rs.8,500.

    2. Aegon Life iReturn Insurance Plan: The iReturn Insurance Plan from Aegon Life is an online term insurance policy that offers a life cover and comes with an inbuilt terminal illness cover. Further, this policy also returns all premium paid during the policy tenure to the policyholder at the end of the tenure. The key features of this plan are:

    • In order to purchase this policy, the policy buyer needs to be between 18 years and 65 years.
    • A policy tenure of 5 years, 10 years, 15 years, or 20 years can be chosen.
    • The maximum maturity age for this policy is 75 years.
    • One can opt for a sum assured between Rs.30 lakh and Rs.4 crore when purchasing this policy.

    3. SBI Life – Saral Swadhan+ Plan: The Saral Swadhan+ Plan from SBI Life Insurance is a non-participating, non-linked, individual term insurance policy. The key benefit of this policy is that at maturity of the policy, you will receive a guaranteed benefit amounting to 100% or 115% of the overall premiums paid during the policy tenure based on whether you opted for a 10-year policy tenure or a 15-year policy tenure. The key features of this policy are listed below:

    • This policy is offered at an affordable cost, with premium rates starting at Rs.1,500.
    • Individuals between 18 years and 55 years can purchase this policy. The maximum maturity age of this policy is 70 years.
    • Policy buyers can opt for a policy term of 10 years or 15 years.
    • Premiums for this policy will have to be paid on an annual basis.
    • The minimum sum assured that is one is required to opt for when purchasing this plan is Rs.30,000. The maximum sum assured that one can opt for is Rs.4,75,000.

    4. Tata AIA Life Insurance iRaksha TROP: The iRaksha TROP from Tata AIA Life Insurance is an online term insurance policy that provides financial security to the policyholder’s dependents by way of the life cover and also returns all premiums paid at the completion of the policy term. The key features of this plan are:

    • Individuals between 18 years and 65 years can purchase this policy. Policyholders can avail coverage up to 75 years of age.
    • The minimum sum assured that one must opt for in order purchase this plan is Rs.50 lakh.
    • The insurer offers preferential premium rates to non-smokers and women.
    • Discounted premium rates are offered to customers who opt for a high sum assured.
    • Policyholders can choose to pay their premiums as a one-time amount, for a limited period of time, or for the entire duration of the policy.

    5. Aviva i-Shield Plan: The i-Shield Plan from Aviva Life Insurance is term insurance policy with a ‘return of premium’ option that is offered at a nominal premium rate. Policy buyers will need to be between 18 years and 55 years of age to purchase this plan and can choose a sum assured between Rs.15 lakh and Rs.5 crore. A few other features of this policy are listed below:

    • This policy can be availed for a minimum tenure of 10 years and a maximum policy tenure of 25 years.
    • Premiums towards this policy can be paid on an annual, bi-annual, or monthly basis.
    • Prospective policy buyers are not required to bear the cost of the medical examination, even if they are required to undergo the test.
    • If the policy buyer opts for a high sum assured, he/she will be eligible to receive a rebate.

    In conclusion, a term insurance policy that provides a maturity benefit is a smart choice if you are looking for a basic life insurance product that also offers returns. However, before you select a particular policy, make sure to compare various policies, check the premium rates, and read through the policy terms and conditions in order to ensure that you are able to make an informed decision.

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