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Comparing Regular and Return of Premium Term Plans

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January 24, 2019
Term Plans are becoming popular nowadays because they have 30-40% lower Premiums as compared to other insurance plans and has Return of Premiums (ROP) Plans for consumers who expect higher returns from their Insurance Plans.

These ROP Plans are Insurance Plans catered out to consumers who expect returns from them, which provide Death Benefits and the sum equivalent to paid premiums is returned on survival of the person insured of that fixed term.

There are many different customised ROP plans in market today that include choice of payment of premiums at once or throughout the term, Paid up Plans that cover for default on premiums after a fixed time with reduced but assured benefits, premium-free years in terms, accident and disability covers and paid add-ons to the policy.

There is also an option for consumers to opt under-writing plans instead. These under-writings are similar to Term Plans but more expensive and their premium also rises with eachadditional benefit taken upon them, but unlike Term Plans, benefits amount payable at death of the person insured or maturity of the plan, are higher.

However, Term Plans are more beneficial for consumers looking for returns because the difference in Premium amount paid, forgoes any interests earned or any benefits that could have been earned on them.

It is fixed investment for the term during which plans can change many times. A Unit-Linked Plan (ULIP) emerges as a better option in that scenario. Thus, in conclusion, Term Plans are better than ROP Plans for returns sought by a consumer.

Here are some Summary point which would help you understand difference between regular insurance plans and ROP plans

  1. Term Plans are becoming popular because theyhave 30-40% lower premiums and has ROP plans for consumers who expect higher returns from their Insurance Plans.
  2. ROP=Plan with death benefits, that returns the paid premium on survival of the person insured for that term.
  3. Different term insurance plans-Paid up plans, short term option, surrender benefits, and plans which also provide accident anddisability cover.

Here are few term insurance plans you can check if you are considering buying term insurance for yourself or your family. For further details, please visit : https://www.hdfclife.com

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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