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The Long Read
Everything you *need to know* is right above this. Scroll down, only if you'd still like to read more (honestly, why?)
When you buy term insurance, your family receives your policy money only if you pass away during the policy duration.
You don’t get any maturity benefit, which means if you outlive the policy, you get nothing!
Unless of course, you opt for an add-on benefit called a Return of Premium rider when buying your term policy.
It enables you to receive a “Survival Benefit” i.e. it refunds only the entire premium paid during the policy duration.
Let's understand with an example:
Say, you’ve bought a term policy with a life cover of ₹ 1 crore and a policy term of 10 years at an annual premium of ₹ 10,000. You can compare your term plan premium.
With this rider, you’ll get only ₹ 1 lakh back if you outlive the policy duration
If you are of the firm mindset that you want to ‘get something back’ if you have paid for it, you should opt for this rider.
However, do understand that this rider only refunds the premiums without any returns.
It is also very expensive and will in turn increase your premium.
It makes more sense to invest this extra money in a mutual fund or fixed deposit because you will get better returns.
Last but not least, even if you opt for this rider, thanks to inflation, the money you will get back will have much less value at the end of your policy term, which means you’re not really getting your “full money back”.
The Return of Premium rider is amongst the most expensive riders available.
The actual cost may vary from insurer to insurer so consult your life insurance company or an insurance agent/advisor to know your options.
Simple, exactly how you buy other riders i.e. at the time of applying for a term insurance plan.
There is no separate eligibility criteria for this rider.
If you are eligible to buy a term plan, you are also eligible to get this rider.
Yes! You can enjoy tax deduction up to ₹ 1.5 lakh on the premium of a term plan with TROP rider under Section 80C of the Income Tax Act 1961.