Term insurance is the most straightforward and basic life coverage you can get. It has a singular focus of offering the policyholder’s nominee the amount set as the sum assured in the case the policyholder dies. To make sure that your family is eligible for these term insurance benefits, you have to keep paying annual premiums on time.
The term period of a term insurance policy depends on the insurance provider and can differ across different policies. It also depends on your personal information like health records, financial records, etc. Usually, this term can span between 20 to 30 years. However, if you survive the policy’s term, the policy just expires. In insurance terms, this means that term insurance has no maturity benefits.
Now, if you want the maturity benefit, you can opt for a ROP term insurance policy. Want to know further? Read on.
What Is ROP Term Insurance?
Known as return of premium term insurance policy, this policy ensures that your life insurance policy ultimately ends up rewarding you. At its core, it is the same as regular term insurance. Its primary feature is giving your dependents the sum assured mentioned in the policy in case of your death. However, the difference here is that it makes sure you don’t end up in a loss if you survive the policy. In other words, if you pay your premiums on time and survive the policy, the insurance provider will reward you with the maturity benefits of the policy.
Features of ROP Term Insurance
- Maturity benefit
The differentiating factor between a regular online term plan and an ROP term plan is that, the latter provides you with a return on your investment. In a ROP term insurance, the maturity benefit is the total amount you paid as premium over the duration of the policy.
- No interest included
Since you get the entire premium you paid back if you survive the policy, you may think that the sum total of your premium payments is like the money that you lent. Following that thought, you may think that the maturity benefit will also include the interest. However, that is not the case.
- Add-on premium not included
Just like most other types of insurance plans, ROP term insurance also has the option for you to include add-ons. This means that you would have to pay additional premium for the additional pieces of coverage. The premium you pay for any add-ons is not included in the maturity benefit. Use a term insurance calculator to know how much premium you would have to pay annually for the coverage you need.
When it comes to making a decision between regular and ROP term insurance, the right choice may differ from person to person. If you simply want a large amount of money ensured in case you die within the policy term, the right choice would be to go for a regular term. However, if you want to be secured during both the situations, you should select an ROP term insurance policy.