Term insurance plans are the most famous traditional choice for buying insurance. Pure-term plans come with various tenure lengths and coverage benefits, allowing policyholders to mitigate the risk. However, we all know that there is no maturity benefit in pure-term plans if the policyholder survives the policy term. If the insured person dies during the policy's term, the nominee is entitled to the sum assured.
Zero-cost term insurance plans tackle the problem that comes with traditional term insurance plans. A zero-cost term insurance plan provides a unique opportunity for a customer to exit a term plan and receive a refund of the premiums paid if they believe they no longer require the term insurance. Unlike other term insurance plans, this one allows the user to opt-out of the plan once it reaches a certain age determined by the insurer.
Benefits of Zero-cost Term Insurance
Here is the list of benefits that comes along with zero-cost term insurance:
- A plan with death benefits usually costs much more than zero-cost term insurance plans. The premium you pay towards the zero-cost is pocket friendly, making it a better choice.
- A no-cost term insurance policy includes riders for many events, including acute illness, accidents, terminal illness, and much more.
- Zero-cost term plans allow you to exit the plan at various stages of your life. As a result, the insurer can choose to exit the plan when he or she no longer has any liabilities or after retirement without fear of not receiving the paid premiums back.
- Individuals under the age of 45 can obtain a no-cost term insurance policy.
Difference Between Zero-cost Term Insurance and Traditional Term Insurance Plans
You can stop paying the premium with the zero-cost plan when you need it. So, suppose you have no financial liabilities or a preying retirement and have more than enough. In that case, you can simply discontinue being insured while receiving a refund of the premiums you have paid up to that point.
Traditional term plans are still a popular choice in the market, but these new term plans are capturing the market fast. Many life insurance companies have started rolling out zero-cost term insurance plans in India.
Who Should Buy Zero-cost Term Insurance Plans
The newly introduced Zero Cost Term Plan is a more affordable alternative to the standard Term Plan and the Return of the Premium Term Plan. If the policyholder dies unexpectedly, the nominee receives the sum assured; if the policyholder survives, the policyholder receives the entire premium minus non-refundable charges and taxes.
It is advisable to check the offering from the life insurance company. Many companies include various terms and conditions. Moreover, you can exit the term insurance plan without penalty. So, a zero-cost term insurance plan is a better option.
Bottom Line
You no longer have to be concerned about losing money because a zero-cost term insurance plan allows policyholders to cancel their plan after a set period and receive their money back. It differs from the traditional term plan or return of premium term plan, which makes this new insurance plan appealing to customers. Many insurance companies are coming up with these plans.
FAQs
Q. What is zero-cost term plan?
A. Zero-cost term insurance is simply a variation on life insurance policies. The policy in this type of term insurance plan allows the policyholder to cancel the plan at any time and receive all premiums paid up to the specified date.
Q. Is zero-cost term policy better than traditional term insurance?
A. It depends on your needs. If you are looking for a more flexible option, zero-cost term insurance is a good option.
Q. Where can I buy zero-cost term insurance plan?
A. You can visit the official website of the life insurance companies and buy the insurance plan online.