Filling In The Current Vacuum

TROP policy promises the virtue of both Term insurance policy and Money back policy

- Arindam Mukherjee

Over the last couple of years, there has been a lot of talk about term insurance. While the importance of life insurance cannot be stressed more, term insurance assumes a special significance as it offers a lump sum amount to the policyholder’s family in case of a mishap, most of these policies are of high value.

But for the money-conscious India, a term insurance always comes with a rider. While it promises a large lump sum in case of the policyholder’s demise, there is no reward or return in case he or she survives the term of the policy. In that case, the premium that a policy buyer pays through several years is lost. Madhu Burugupalli, Head of Products, ICICI Prudential Life Insurance Limited, stated, “Pure term insurance plans are protection products and offer a route to provide financial security to the family by making a lump sum payout upon demise of the policyholder.”

However, for most Indians, a return on investment is always top priority. And that is where a term insurance loses out, despite being popular and has found many buyers over the last few years.

Looking at the Indian mindset, many companies have started a policy that provides return on investment or one that returns the premium that a person has paid at the end of the policy period in case the buyer survives.

Enter the Term insurance with Return of Premium or TROP policy which promises the virtues of both—a Term insurance policy and a money back policy. Burugupalli, said, “While, return of premium term plans also offer a lump sum on demise, they are not truly pure protection plans as they have an in-built savings component to ensure that the entire premium is returned to the customer on survival till the end of the policy tenure. Hence, the premium of return of premium term plans tend to be on the higher side.”