TROP plans are a variant of Term/ Pure Protection plans with most of the features being common between the two plans. TROP plans come with an added advantage of income replacement along with the benefit of premium refund at maturity if the sum assured was not paid to the nominee within the policy term.
Term with Return of Premium life insurance plans provide dual benefit. Firstly, they are cost effective and have lower premiums when compared with investment plans as well as they give you peace of mind by providing financial security to the family in case something unfortunate happens. Secondly the plan also offers premium return, which is guaranteed for all the premiums paid during the tenure of the policy.
Technically, a Term with Return of Premium plan is a non participating term assurance plan. When compared with a term plan the following features are notable.
What to consider?
Life Assured is the person whose life risk is covered under the plan. For TROP plans Life assured is essentially the proposer as well (in general cases).
Age of the Life Assured decides the risk and thus becomes one of the important parameters for deciding the premium. The sooner you get insured, the lower the risk premium and better the chances of getting higher cover amount. Lifestyle has an impact too, a smoker possesses higher risk than a non smoker.
Policy Term is the years for which the protection is opted for. Generally available for 15- 20 years, it gives an option to get a cover till the age of 65- 70 years.
Premium payable works on level premium concept and thus remains the same throughout the policy term unless the contract is broken in between.
Death Benefit or the Sum assured is the life cover chosen by the individual and agreed upon by the insurer based on their underwriting guidelines. It becomes payable to the nominee in the unfortunate event of death of the life assured/ person insured. The eligibility depends upon the financial worth of the individual.
Maturity Age is the age of the life assured at which the policy matures and the maturity benefit becomes payable to the life assured.
Maturity benefit is the amount payable to the life assured/ proposer at maturity of the plan. The plan essentially returns the premium paid during the term. Various insurers have additional guaranteed benefits added onto it. For example: Metlife Met Suraksha TROP guarantees 10% of premium added to the base premium paid.
Helps in choosing the best available in the market. PolicyBazaar.com comparison and plan selection tip:
What is Term Return of Premium Insurance Plan?
Term Return of Premium Insurance Plan is like Term Plan but with the added advantage of Premium Refund at the end of the plan if the Risk Cover has not been paid during the tenure of the plan. Since TROP Plans have Premium Refund feature, they will have slightly higher premiums when compared to Term Plans.
Why Term Return of Premium (TROP) Insurance Plans?
Though the adequate insurance cover need varies from one person to another; as a thumb rule your TROP insurance cover should be at least 15 to 20 times of your gross annual income. Depending upon your age, the multiplier will decrease as you grow older.
How much life cover would you like?
Though the need varies from one person to other, as a rule of the thumb, your term insurance cover should have at least 20 times of your gross annual income. Depending upon your age, the multiplier will decrease as you grow older.
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