For ensuring the financial security of your family, you should create a robust financial blueprint as early as possible. Term insurance will be a vital part of this strategy, and it will enable a fixed sum assured or death benefit for your family members in case anything happens to you in the future. While all this sounds good, there is a return of premium features that you can also consider.
Term Plan with Return of Premium- How It Works?
While choosing term insurance, you may consider a term plan with return of premium facilities. These are policies that come in immensely handy if you start early. When you start early, you can expect to get higher coverage at a sizably lower premium. The insurance company will see you as a low-risk customer with lesser risks of health issues or fatalities during this time. Of course, the return of premium features is another advantage that you should not miss. One of the biggest benefits of starting young is that you will get a relatively lower premium amount for comparatively higher coverage. This is because the insurer will perceive you as a low-risk policyholder with fewer risks of fatalities at a young age. Another advantage is choosing this facility, i.e. the return of premium.
What this means is that the insurance company will refund the premiums paid by you over the policy tenure once you outlive the same. Hence, if you are young, then you can possibly get life coverage for a long duration up to your retirement. During this time, you can make other investments, knowing that the term plan coverage will financially secure your family in case something happens to you. Yet, if you outlive the policy tenure, which you are likely to do, then the refund of the premiums at your retirement will give you some much-needed extra cash in hand. This can be used to meet various future financial goals including taking a vacation, covering higher education costs of children, home repairs and renovation, buying a car, and so on.
Hence, if you are young, then you may consider a term plan with return of premium. Make sure you check the charges and other statutory deductions while selecting these policies. At the same time, go through the terms and conditions with care prior to finalizing the plan. You can also integrate more riders into the term insurance policy with a relatively lower premium in case you are still young. The overall premium amount will not pinch you as much as it will for older adults.
Conclusion- Term Insurance Plans are Must-Haves for You
When it comes to ensuring the financial well-being of your family members, you should not look anywhere else other than term plans. Yet, the return of premium option gives you another avenue to get a lump sum amount to meet future costs in case you are a young adult. If you are still confused, get professional advice before finalizing your term plan. This can be a handy option if you are still in your early or mid-20s and are about to purchase life coverage soon.
