TROP policy promises the virtue of both Term insurance policy and Money back policy
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.”
This story is from the July 2019 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the July 2019 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
The Future Of Credit Card Usage
Credit card usage is increasing in India, but it's prudent to manage credit wisely
Liquidity Coverage Ratio Framework
At the recent monetary policy committee meeting in April 2024, Reserve Bank of India (RBI) Governor Shaktikanta Das proposed changes in the liquidity coverage ratio (LCR) framework to successfully meet liquidity risk.
STRATEGIES TO HELP YOU STAY ABROAD AFTER STUDIES
More Indians are now going abroad for higher studies with plans to stay and work. But living costs, the lack of job opportunities and the burden of education loans could often pose a problem. Assess the opportunities and be practical before making such a decision
FROM SAVINGS TO SECURITY: HOW INDIANS ARE PREPARING FOR THEIR SUNSET YEARS
The Outlook Money - Toluna Retirement Survey conducted in December-end 2023 threw light on how Indians plan and save for retirement. A growing number of Indians now understand the necessity of retirement planning, and want to enjoy their retirement years with kith and kin
Here's How To Install A Solar Panel
It is the season of solar panel subsidy announcements. Right after the Centre launched the PM Surya Ghar Muft Bijli Yojana to offer subsidies to 10 million households to set up rooftop solar systems, the Delhi government has announced an extra capital subsidy of ₹2,000 per kilowatt (kW) to Delhi residents for rooftop solar panel installation. Both governments have caps on subsidies. Some other states, too, offer incentives on the use of solar rooftop panels.
Master Your Own Money Choices
Instead of judging others, have clarity about what you want from your money, where you want to spend it and how you want to feel about it
3 THINGS TO CHECK BEFORE YOU EXIT YOUR POLICY
If you think that the insurance policy you bought doesn't quite align with your goals, you may surrender it. But that comes at a cost. Here's why you should do the calculations
Small And Mid Cap Rally: Be Wary
You may include small- and mid-caps in your portfolio for diversification, but understand that they may not replicate last year's returns and are relatively more volatile
HOW TO MAKE SENSE OF THE GOLD RUSH?
The precious metal has been on an upward rally for the last couple of years due to factors as diverse as geopolitical conflicts, bulk buying by central banks, and hope of rate cuts, of late. The key, therefore, is to invest in gold in a staggered manner
'People Are Normal. They Are Sometimes Ignorant But They Are Not Stupid'
Meir Statman, the Glenn Klimek Professor of Finance, Leavey School of Business, Santa Clara University, California, is the second generation of behavioural finance experts who refused to label people as \"irrational\" and instead called them \"normal\". In his latest book, A Wealth of Well-Being: A Holistic Approach to Behavioral Finance, he expands the circle of finance to include life well-being and shows how they are inextricably intertwined. As part of an interview series, 'Wealth Wizards: Money Maestros in conversation with Nidhi Sinha, Editor, Outlook Money', Statman spoke about his research, and explained concepts through anecdotes that can help you take balanced decisions. Edited excerpts:
