Money-Back Term Insurance
Term Life Insurance provides an affordable solution to cover the risk of death for our short-term needs, making it an attractive option for many individuals.
While there are various types of Term Life Insurance available, some may be concerned about the lack of benefits if no unexpected death occurs during the term. With a basic term insurance plan, the coverage expires at the end of the term, and no benefit is paid, potentially rendering premiums wasted.
Term Insurance with Return of Premium (TROP)
Term Insurance with Return of Premium (TROP) offers a solution by providing both a death benefit and a survival benefit. If no claims are made during the coverage period, the policy returns all premiums paid upon maturity. This ensures that your investment into the policy through premiums is not wasted, providing peace of mind to you and financial protection to your family in the event of your untimely demise.Â
For example, if you purchase a TROP policy with a $300,000 sum assured for 20 years with an annual premium of $1200, your family will receive the death benefit if an unforeseen event occurs. However, if you remain healthy and live beyond the term, you will receive a tax-free return of all premiums paid, ensuring your investment is secure.
TROP serves as a reliable investment tool for those prioritizing the financial security of their families, offering peace of mind in uncertain times.
Appealing Benefits
Premium Return: Upon outliving the policy term, all paid premiums are refunded, providing flexibility for various financial needs such as business ventures, education, purchasing assets, or covering living expenses.
Death Benefit: In the unfortunate event of the insured’s death during the coverage period, the beneficiary receives the assured death benefit. This sum can be utilized to address financial obligations such as living expenses, children’s education or marriage expenses, or paying off mortgages.
Stable Premiums: Throughout the chosen term, whether it be 20 or 30 years, premiums remain consistent, providing predictability in financial planning.
Tax Advantages: Both the death benefit and the premiums are tax-free, offering additional financial benefits. The government does not impose taxes on either the death benefit or the premium amount.
Policy Customization: Policyholders have the flexibility to customize their policies according to their specific needs and preferences by adding optional features, known as riders, such as:
Children’s Term Rider: Provides temporary insurance coverage for eligible children under 18 years old, with the option to increase coverage on their 18th birthday and later on their 25th birthday, ensuring their insurability and providing financial security for their future.
Waiver of Premium for Disability: If the primary insured becomes totally disabled before the age of 60 for a continuous period of six months, this option waives off premiums for as long as the disability persists, safeguarding the policyholder’s financial interests.
the numbers
Results you can measure
Disadvantage
Though the TROP (Money-Back Term Insurance) policy boasts several notable features, it comes with a higher cost, making it unaffordable for some individuals. In summary, the Term Insurance with Return of Premium (Money-Back Term Insurance) serves as a highly efficient financial tool, enabling effective money management while simultaneously providing life security. However, it’s important to recognize that no single plan is universally suitable for everyone, as individuals have diverse financial needs.
Therefore, it’s advisable for individuals to select a plan tailored to their requirements through a thorough needs analysis conducted by an experienced Insurance Advisor. While the ‘Term Insurance Return of Premium’ (Money-Back Term Insurance) plan is currently unavailable in Canada but is accessible in the USA, we anticipate its introduction in the future, enabling Canadians to benefit from this advantageous plan. (Please note: The above information is provided for informational purposes only.)
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FAQ’s
In the event of no claims throughout the coverage period of the ‘Money-back Term Insurance Plan’ offered by Taaj Insurance; upon policy maturity, you will receive a full refund of all premiums paid during the coverage tenure, contingent upon the policy being active at that time. For instance, with a ‘Term-20 Money-back Term Insurance Plan’ featuring a $300,000 sum assured and an annual premium of $1200; upon the term’s conclusion, you will receive a complete refund of your premiums totaling $24,000.
: No, the death benefit that your beneficiaries will receive is totally tax-free.
While the Money-back Term Insurance may entail slightly higher costs than basic term insurance, it remains significantly more affordable compared to whole life insurance policies. While whole life insurance is notably expensive, Money-back Term Insurance typically costs only 3 to 3.5 times more than basic term insurance plans.
Certainly not. Upon the term’s conclusion, your premiums are refunded tax-free in the absence of any claims during the coverage period.
Certainly not. You or your beneficiaries have the freedom to utilize the refunded premiums or death benefit as desired, whether for living expenses, children’s education or marriage, paying off outstanding mortgages, and more. The company respects your autonomy in determining how to allocate the funds and does not impose any restrictions on their usage.
Absolutely, indeed! By paying an extra premium, you can personalize the policy to align with your specific requirements and preferences. This customization can include adding riders such as Accidental Death Benefit, Waiver of Premium in the event of the owner’s disability, and Children’s Term Insurance, among others.
Yes, as per the provisions of different companies, after a certain specified period of time that the policy has been in force, the policy has a cash value that is determined by a formula say for example CV= P x N where the cash value increases in increments of 10%, 20%, 30% going up to 100% (full refund of paid premiums) in set intervals of time.
Yes, you may request surrender of the policy in writing, and you will receive the cash value less any debts. Your insurance will terminate on the date the insurance carrier issues the cheque for the cash value.
No. The policy doesn’t offer any policy loans.
Should any premium remain unpaid at the conclusion of the Grace Period, the policy will be terminated automatically. Any accrued Cash value, if applicable, will be disbursed to you in accordance with the provisions outlined in the Money-back Term Insurance Policy.