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

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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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• 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.

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• 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
  for.
• 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
  assured.

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• 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
  years.
• 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.

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• 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
  expenses.
• 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.

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• 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
  age.
• 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
  policy.

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