Difference Between Normal Term Plan, Term Plan With Return Of Premium And Term Plan With Monthly Income - PowerPoint PPT Presentation

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Difference Between Normal Term Plan, Term Plan With Return Of Premium And Term Plan With Monthly Income


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Title: Difference Between Normal Term Plan, Term Plan With Return Of Premium And Term Plan With Monthly Income

Difference Between Normal Term Plan, Term Plan
With Return Of Premium And Term Plan With Monthly
  • To be very true, term plans are the best
    insurance plans you can currently buy for true
    worth of your money.
  • Term plans are essentially insurance plans that
    run over a period of time, normally the insurers
    lifetime. However, since most insurers tend to
    outgrow the term they applied their insurance
    for, or tend to benefit more from their policy in
    the short-run too, with time term plans have now
    diversified into ROP term plans and Endowment
    Term plans.

  • General Term Plans (Basic Life Insurance)
  • A term plan is an insurance policy that offers a
    death benefit (sum assured) to the nominee or
    beneficiary of the policyholder. The death
    benefit is adjudged when the policy is applied
  • Normally, suicides are not covered in this life
    insurance scheme until the 2nd year onwards. If
    the policyholder is still alive at the end of the
    term applied for, there is normally no benefit.
  • However, the money you invest into it comes back
    to you with no income tax cuts under section 80c
    of IT act.
  • The tax exemption proceeds are given to the
    nominee in case of death of the policyholder.
    Ideally, you should opt for life cover of at
    least 15-20 times your annual income so that the
    sum assured takes care of all possible needs of
    your beneficiary and your immediate family.
  • Normally, women and non-smokers are given
    preferential premium rates with a higher sum

  • Term Plan with Return of Premium (ROP)
  • This insurance plan is very similar to an
    endowment plan. Endowment plans normally differ
    from basic term plans in one very critical aspect
    i.e. the maturity benefit.
  • Unlike term plans, the sum assured is paid out in
    circumstances, death and survival. This way, the
    insurer does not lose out on premium payments and
    their value.
  • However, in this kind of policy, the fees and
    expenses are covered in higher premiums in order
    to pay out the sum assured with profits.
  • The profits are generally an outcome of the
    premium amount you deposit that is invested in
    various asset markets like equities and debt. In
    these plans, premiums are normally decided
    according to the age of the person. Such plans
    normally feature terms between 15 years to 20
  • However, you can opt to increase it until 65
    years to 70 years (if you think you will die at
    that particular age).In case of survival, the
    policyholder might not get the coverage at the
    earlier rate of decided premiums after the expiry
    of the policys term.
  • The policy buyer now has to either obtain
    extended term coverage with a different payment
    option or forgo the entire coverage to make a
    fresh start.

  • Term Plan With Monthly Income (TROP)
  • This term plan is similar to a money back or
    pension plan policy in which the insurer is paid
    a certain amount each month of the year as living
  • Online Term Insurance Plans In India of making
    periodic payments to the insurer over the entire
    policy term (from the sum insured) helps people,
    especially older people to meet daily expenses
    and the cost of living.
  • This payment of the long-term sum insured (like
    in term plans with ROP) in regular intervals is
    also beneficial as the rest of the balance of the
    sum assured will be paid to the policyholder if
    he/she survives the period of the term.

  • In case you are an old-age person, who is retired
    or living at the behest of their child/childrens
    money, you can opt for a term plan with a monthly
    income that helps you meet most of your monthly
    expenses with your own money according to the
    monthly pension that you get from the insurance
    company. This way, not only will you be
    financially secure, you will also not have to beg
    for money to fulfil your desires at a very old
  • We hope this comparison was helpful to you and
    that you make a choice according to your age and
    current income status. Do not opt for the wrong
    policy and repent later. This guide is enough to
    tell you gauge all the pros and cons of each

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