Return of Premium Life Insurance: Getting Premiums Back if You Outlive the Policy

Insurance Policies

This term means to provide financial support to the family members if you ever die previously in the form of a death benefit. It is paid out when you die and the cash amount is tax-free and if the policy’s term and effect. So, keep in mind if your policy lapses/is inactive at the time of death, then the benefits will also not be given.

 

These term policies offer a high sum assured and insurance coverage for 5-40 years when compared with relatively cheaper premiums to other types of insurance plans.

Throughout the policy term, the premium for the term plan stays the same. When we talk about any basic term plan it does not offer any benefits. If you will not get your money be paid or get back the money.

 

Pure life policies are term insurance plans when the policyholder dies that offer a death benefit. There are ways to secure your family against life’s uncertainty.

 

Outliving Life Insurance Policy

Nothing will happen as your insurance policy ends, and the policy expires, its coverage lapses with it.  If the previous insurance lapses you can buy another term or policy, try or renew to extend the coverage.

 

There are two outcomes:

1. Within the policy term, if the policyholder dies:

Along with additional payouts [if applicable] and a death benefit. It is paid to the family and nominee members.

 

1. Outlives/survives the term life insurance, if the policyholder:

In this, nothing is paid out.

 

Do I Get My Money Back If I Outlive My Term Life Insurance Policy?

If you outlive the policy the general no, insurance basic term plans do not offer any kind of maturity or survival benefits. If you opted for a Term Return of Premium [TROP] Plan during the policy’s term minus GST, you get a lump sum payment.

 

The feature ROP can be added as an add-on rider to your policy. With our term plan at Tata AIA, we offer it as a built-in feature, you can opt out or in on the purchase policy. Note that this feature will increase your premium policy.

 

You must consider if you have dependents or younger individuals if you want some cash payout or if you think to survive your policy.

 

Who Can Buy Term Insurance With Return Of Premiums?

When it comes to commitments financially like when it comes to buying with TROP, everyone has their own goals. Depending on income, lifestyle, health condition, and age you can select this plan. Based on the above criteria you can evaluate your financial situation for choosing the desired plan.

 

Unmarried: You may have specific responsibilities for your parents if they are aged. Hence, the death benefit in the event of unfortunate demise.

 

If you have no children and you are married then it depends upon your source of income with premium return.

Things to do if your Insurance policy is expiring

You can extend your coverage:-  Today most of the term policies come with a renewability option, this option arises only when you pay your premiums continually. Once the term technically ends this means the amount is no longer the same.

Based on the age the premium policy will increase every year and can be expensive.

 

You need to convert your plan to a permanent policy or whole life:- You can now convert your term plan to a permanent plan with the help of a conversion feature. If you want to account for future uncertainty then premiums are often higher for conversion. It can vary across insurers, so you should read and discuss the wording properly and discuss whether a feature before purchasing a policy is available.

 

A new policy must be bought: Buying a new term policy is a better option rather than conversions or extensions if you are in good health and young. Premiums are lower and cost a lot less than conversion. You must go through the application process by buying a new policy.

 

You can cancel your life insurance: To warrant ongoing insurance coverage If you pay off all your saved money or liabilities for your family members and yourself. This option is in case of any eventualities and if you are sure your savings are substantial enough.

 

What Can I Do If my term of insurance is ending, If I have been diagnosed with critical illness?

In such cases converting to a permanent plan is the best idea. Here if you experience a change in health:

 

• If the disease is not life-threatening and you have been diagnosed with a chronic disease: Is conversion the only way to gain substantial coverage? The premium can be increased and you can assume that the benefit of death is the same. The benefit will be more affordable than the extension.

 

 

• If you are prone to some critical issues you can buy a critical rider and it will be beneficial to buy it with your term plan.

 

 

• If diagnosed with a terminal illness, as it is difficult to buy a new life policy you can choose to extend the policy that can offer a benefit of substantial death.

 

You should priorly mention and always disclose any condition that can cause premature death before purchasing any policy to the insurer, it will ensure that your family is paid when you die.

 

As you declare that you are suffering from critical illness to the insurer and you are offered coverage for your illness, your family will get the benefits.

 

Conclusion

It is not always bad to outlive your insurance policy. The aim is to ensure you do not encounter where your family and you can use it without most insurance. If you find that your policy is ending, any strategies that can be implemented like converting your plan, or getting an extension, can be beneficial.

 

You must keep in mind that permanent life insurance you are committing for life. If it comes to choosing a coverage amount when it comes to conversions you can continue and you can afford into the future. If you find that the term of your insurance policy is ending soon, strategies that are implemented that are listed above like converting your plan, or even buying a new one.