Benefits Of Zero-Cost Term Insurance

There's barely anyone out there who hasn't heard of the term life insurance. These days, many insurance providers have started offering what the market describes as zero-cost term insurance. Policy buyers are now given the choice to cancel the policy early and possibly receive their premiums back. Additionally, there will be no extra fees or premium differences as a result of this convenience. But keep in mind that nothing comes for free, and there are strict requirements for the early exit reward as well.

So, what exactly is zero-cost term insurance?

Let's look at this new term insurance variant plan to get a better idea of what it is and the advantages it offers. But first, let’s start from the basics.

Typically, there were two types of term insurance plans in the market so far, namely, term plan and return of premium term plan. While a term plan makes sure that if a policyholder dies during the policy’s duration, the nominee (partner or family members) receives the cover money. But if the policyholder outlives the policy term, no sum is paid even to the policyholder or the nominee. On contrary, a return of premium (ROP) offers a refund of money if the insured lives through the policy period. The only catch is that an ROP plan is twice the cost of a basic term plan.

Zero-cost term insurance is nothing but a variant of life insurance plans. In this type of term insurance plan, the policy enables the policyholder to cancel the plan at a certain time and get all the premiums paid up to the specified date. This type of facility is only available for extended-term plans. Plus, it is special and alluring due to the return of the premium option. It is best suited for salaried class people.

Understanding the benefits of zero-cost term insurance will help those people who want their money back if they live to the end of the insurance term. This is where the policy might prove to be advantageous for them.

• Cost effective ROP plans are typically 50% more expensive than zero-cost plans. Because of this, customers will find a zero-cost term insurance plan more cost-effective than ROP term plans. In fact, they cost the same as regular term plans.

• Quick return of premiums The insurance plan ends immediately when the policyholder surrenders the policy and demands a refund of premiums.

• Feasible for long-term plans These plans are most suitable for those who are unsure of their retirement age or who will need to provide for family members in their later years.

• Add on benefits A zero-cost term insurance plan provides various riders for a wide variety of events such as acute illness, accidents, terminal illness, and much more.

• Flexible eligibility A zero-cost term insurance plan can be availed of by individuals below 45 years of age.

You no longer need to worry about losing money as a zero-cost term insurance plan gives policyholders the flexibility to cancel their plan after a specific amount of time and receive their money back, excluding the GST. It is unlike the traditional term plan or return of premium term plan and this is what makes this new variant of insurance plan attractive to the customers. So, if you wish to cancel the coverage whenever you decide to, you no longer need an excuse to terminate it.