Combining Return of Premium and Critical Illness Cover in One Term Plan – Life is full of uncertainties, and it is essential to protect ourselves and our loved ones from any financial hardships that may arise. This is where term insurance comes into play. It provides financial security to your family in case of your unexpected demise, ensuring that they are well taken care of even in your absence.
On the other hand, critical illness cover offers protection against life-threatening ailments such as cancer, stroke, and kidney failure. It provides a lump sum payment if you are diagnosed with a listed illness, allowing you to cover medical expenses and other financial commitments.
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Why Buy Term Plan With Return Of Premium?
It is important to understand the reasons to buy term insurance. You must know the benefits of combining the return of premium and critical illness cover in one term plan. This unique combination not only offers life cover but also provides the opportunity to receive a refund of the premium paid at the end of the policy term if no claim has been made.
What Is the Return Of Premium (ROP) in Term Insurance?
Return Of Premium (ROP) is a feature offered by certain term insurance plans where the insurer refunds all or part of the premium paid during the policy term if no claims have been made. It provides an additional benefit by ensuring that your premiums do not go to waste even if you do not need to make a claim.
Benefits of ROP in Term Insurance
Here are some of the key benefits:
Financial Security: If you survive the policy term, ROP ensures that you receive a refund of all the premiums paid. This can provide you with a financial cushion or even act as a retirement corpus.
Flexibility: The ROP term insurance plans offer flexibility by allowing you to choose the policy term, sum assured, and premium payment frequency based on your specific needs and financial goals.
Tax Benefits: The premiums paid towards term insurance with ROP are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The maturity proceeds are also tax-free under Section 10(10D).
Understanding Critical Illness Cover in Term Insurance
Critical illness cover is an add-on rider that provides coverage against specific life-threatening ailments and lifestyle diseases. It offers comprehensive protection by providing a lump sum payout upon diagnosis of any covered critical illness.
Benefits of Critical Illness Cover
Here are some of the key benefits:
Financial Security: Having critical illness cover ensures that you have a financial safety net to cover these expenses and allows you to focus on your recovery without worrying about financial burdens.
Additional Coverage: Critical illness cover can be added to your base term insurance policy, providing you with comprehensive protection against both death and critical illnesses.
Tax Benefits: The premiums paid towards critical illness coverage are eligible for tax deductions under Section 80D of the Income Tax Act, 1961.
How Does Critical Illness Cover Provide Financial Protection?
The critical illness rider provides a lump sum payout to cover medical expenses, seek specialised treatment, or even replace lost income during the treatment period. Having critical illness cover ensures that financial worries do not hinder your recovery and allows you to focus on regaining your health.
Combining Return Of Premium and Critical Illness Cover
You can enjoy the benefits of both features by combining the return of premium and critical illness cover in one term plan. If you survive the policy term without making any claims, you will receive a refund of all the premiums paid through the ROP feature. At the same time, the critical illness cover offers protection against life-threatening ailments, providing a lump sum payout upon diagnosis.
This combination ensures that you have comprehensive coverage against both death and critical illnesses while also having the opportunity to receive a refund of premiums if no claims are made.
Calculate Your Coverage Needs
Use a term insurance premium calculator to determine the ideal coverage amount based on your age, income, liabilities, financial goals, and family’s needs. This will help you choose the appropriate sum assured and policy term for your specific requirements.
Research Different Policies
Research different insurance providers and compare their offerings in terms of features, benefits, claim settlement ratio, premium rates, etc. Consider factors such as the financial stability of the insurer and customer reviews before making a decision.
Choose Return Of Premium and Critical Illness Rider
Select a term insurance plan that offers both return of premium and critical illness rider as add-ons. Ensure that the policy provides adequate coverage based on your needs and preferences.
Fill Out the Application Form
Fill out the application form accurately and provide all necessary details about your personal information, medical history, lifestyle habits, etc.
Pay the Premium
Pay the premium for the term insurance plan with a return of premium and critical illness cover based on the payment frequency chosen by you (monthly, quarterly, annually).
Conclusion
Combining the return of premium and critical illness cover in one term plan provides comprehensive coverage against death and life-threatening ailments while also offering the opportunity to receive a refund of premiums if no claims are made. This unique combination ensures that you have a safety net to protect your loved ones in case of unfortunate events while also providing financial security during your lifetime.
To make an informed decision, use a term insurance premium calculator to determine your coverage needs and research different policies from reliable insurance providers.