Premium Return Plan is one of the alterative of Term Protection plan as it has features similar to Premium back term plan. However, it has one major advantage over other term plans and that is if the nominee was not given assured amount, the premiums will be paid back to insured.
Basic elements on which Premium Back Term Plans depend on-
- Age– What age you are of matters a lot at time of purchasing Premium Return Term Plan (PRTP)because as old you are as high the risk. Therefore, better to buy plan early, then lately so that you can enjoy maximum benefits and gets higher amount as well. Beside age, your habits like consuming drugs, smoking, drinking, etc also affects your policy premium rates and profit.
- Policy Period– For how long you want to buy protection aka policy. Usually, people indemnifies for 15-20 years till age 70.
- Premium– Throughout the policy term, premium remains constant except when the plan is tumbled in mid.
- Death benefit– It is the amount (sum assured) given to nominee stated in the policy after the death of insured.
- Maturity Benefit– Usually, if your term plan reaches its maturity date before your death, you don't get any money or benefit. However, in case of Premium Return Plans, the insurer guarantee to pay back the entire premium amount you paid during the policy term period. Therefore, this plan involves less risk and more benefits and hence, it is a win-win case from all the sides. In fact, some return premium policies also promise to pay interest on basic premium along with refunding your premium.
- Maturity age- It is the date or time when your policy reaches its due date and you are all set to receive maturity benefits as an insured.
Merits of Purchasing Premium Back Term Policies-
Premium back Term Plans has many merits that are difficult to ignore. Its feature to repay the premium if insurer failed to pay assured amount, cheap premium rates etc make is exceptional. These features also become basis for different term plans comparison. This type of plan assures maximum security and advantages with minimum risks. Therefore, this type policy seems to have bright future. Some of the merits of purchasing premium back term policies are given below-
- Cost is low therefore risk is minimum
- The choice to add additional benefit or rider make it more appealing because then, it becomes total protection plan.
- Usually, these plans assured to repay premium you paid except rider payments
- It provides premium reimbursement at maturity. Therefore, you do not lose premium you paid during term period.
- Once you buy this kind of plan, the premium remains stable throughout the term of the policy unless the contract is tumbled.
- Moreover, this type of term plan provides tax benefits.
Comparison between Regular Term Plan and Premium Return Term Plan
Below is the term plans comparison of three Premium Return Policies –
| Basis | Max Life Premium Return Term Plan | Aviva i-Shield Term Return of Premium | BSLI Premium Back Term Plan |
| Entry Age | 21-55 years (Maturity age- 75 years) | 18-55 years (Maturity age- 65 years) | 18- 50 years (for 20 years plans) and 18-55 years for (10-15 year plan) |
| Policy Period | 20 to 30 years | 10 to 25 years | 10-20 years |
| Sum Assured | Rs. 5 lakhs to Rs. 1 crore | Rs.15 lakhs to Rs.6 crores | Minimum amount- Rs. 2 lakhs |
| Premium Return | Refund all premium paid as well as extra premium if any. | 110% of the premium will be repaid. | Money refunded is equal to premium you paid. |
These are just few of premium return plans that you choose from. Beside these, there are many others too with various benefits.
When you purchase this type of policy, following factors are taken into consideration-
- What is already covered via your existing policy?
- How wide area of your life you want to cover. That is how much the policy indemnifies your life.
- Your health and medical status.
- Monetary liability evaluation
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