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How Can You Get Survival Benefits with a Term Plan?

Published on 30 September, 2020 at 1:25 pm By

One of life’s most significant complexities is that it is uncertain. That is why, no matter how much you plan your future, you can never be sure of how it will unfold. Precisely because of this reason, there is a lot of insecurity in life. It is here that life insurance plans like term life insurance come into the picture.

A term insurance policy promises to offer financial support to your family upon an unfortunate happening that may lead to your absence in their life. However, while a pure term plan offers much-needed security, many of you often feel that since it does not provide any survival benefits, it is not the best option to choose.

To address this concern, insurers also offer term life insurance plans with survival benefits in the form of TROP. If you are wondering what TROP is, then let us tell you all about it in detail below.

 

TROP: The Term Insurance Policy with Survival Benefits

A TROP plan stands for a Term Plan with Return of Premium benefit. In such a term life insurance policy, you receive maturity benefits if you survive the term of your plan. The insurer offers you survival benefits in the form of the cumulative sum of all the premiums paid by you during the period.

In this way, it assures you of your loved one’s security during the term as well as provides you with maturity benefit by way of premium payback. This feature of such a kind of term life insurance plan makes it a perfect option for securing your family in the right way.


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What is the Premium Payment Towards TROP?

Purchasing a term life insurance plan with survival benefits requires you to pay only a little extra premium amount as compared to what you need to pay in case of a regular term insurance policy. However, you should not mind paying this additional premium amount as the maturity or survival benefit can prove to be beneficial for you and your family years later. You may utilize the maturity benefit for investing further or for essential expenditures like buying a house or for the marriage of your kids.



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Now that you know how term life insurance plan with return of premium works, let us tell you what all benefits you can receive when you purchase one:

  • More Value for Money

The major drawback in the case of a regular term life insurance plan is that you do not receive any financial benefit when you outlive the term. You may feel that your money went futile.

TROP by offering you survival benefit ensures that you can get the maximum benefit from such a plan. Such a term life insurance policy provides your family with the sum assured in case of loss of a breadwinner during the term. And, if you, i.e. the policyholder survives the term, then also the insurer provides you with a financial payout in the form of cumulative of the premium paid. It offers you maximum value for the amount you pay towards it.

  • Tax Benefits

Just like a pure term life insurance plan, TROP is also covered under the provisions of Section 80C of the Income Tax Act, 1961. Therefore, when you purchase such a term insurance policy, you will enjoy deduction benefits up to the limit of Rs. 1.5 lakhs. Also, the benefit amount will be tax-free under Section 10(10D) of the Act.

  • Benefits Under MWPA Act

You also have the option to endorse a term life insurance plan with maturity benefit under the Married Women’s Property Act (MWPA), 1874. As per section 6 of the Act,  when you endorse the plan in favour of your spouse and children, it will assure them that no other person (your parents, relatives, or friends) will be able to exercise any right to the monetary benefits offered under the policy.

Even you, as the insured person, will not have any claim on the survival benefits of the policy in case you survive the term. In this way, you will entitle your wife and children to receive the sum assured or the survival benefits, whatever the case may be.

  • Additional Benefits

Purchasing a term life insurance plan with maturity benefit also offers you additional benefits in some cases. Term plan with return of premium option, as provided by reputable insurers like Max Life Insurance provides benefits such as protection against 40 critical illnesses, waiver of premium benefit, accidental death benefit, and disability benefit. Further, such plans also offer you the option to increase your term life insurance coverage as per your evolving needs. In general, most term insurance policies, whether TROP or otherwise provide you coverage up to the age of 85 years.


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Buy Term Life Insurance with Survival Benefits

So, far you may only be aware of term insurance meaning and how the regular plan offers you security, now you also know that insurers offer term insurance policy with survival benefits. Given that such a plan provides more significant benefits over a regular term life insurance plan, you can consider purchasing this for your family and yourself. Opting for such a plan will offer you security during the term as well as satisfaction upon its end, in case you outlive the duration of the policy.

Make a decisive choice and enjoy both security and peace of mind.

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