Why Should You Opt For Zero-Cost Term Insurance?

Zero-cost term insurance is a kind of term insurance in which you, as the insured person, get back the sum total of all the premiums that you have pain in the course of the term if you outlive the policy. This is a game changer because you, as a salaried employee might wonder why I should invest in such a policy from which the chance of return is so less.

Are Zero-Cost Term Insurance And Term Insurance The Same?

Technically, zero-cost term insurance is a kind of term insurance. So, the basic features remain the same. Therefore, they also stand on a death benefit ground, taking the premium in instalments over a large period of time. However, it is the return of the premium that makes it so unique and attractive. There are also various riders to enhance it. These riders cover a wide range of situations ranging from terminal illnesses to critical illnesses, accidents, and so on. This will become clearer when you take a look at the actual policies.

Who Came up With The Idea of Such Term Insurance?

In India, Max Life Insurance was the brain behind pioneering such zero-cost term insurance. They did this because they wanted more and more people to invest in term insurance without having to worry about losing money constantly. You can see the details of their plan in the next section. However, they are not the only ones in India currently providing zero-cost term insurance. Bajaj Allianz also has a similar plan. You might want to take a look at both of them and then realise why you can also go for one.

Max Life Smart Secure Plus Plan

This zero-cost term policy of Max Life Insurance assures total return of premium. It is a great choice if you are looking for a contingency plan. The plan is designed to look after both you and your family. So, what does it cover?

1. 2 death benefit
2. Terminal illness
3. Exit value

There are also some optional coverages with extra charges. These include:

1. Premium breaks
2. Joint life cover
3. Additional payout on accidental death, etc.

Bajaj Allianz eTouch Term Plan

The zero-cost term policy of Bajaj Allianz also ensures a complete return of the premiums. As against Max Life Smart Secure Plus Plan, it might not be the best plan involving the family. However, it is great as an individual term plan that is non-participating. So, what are the best parts about it?

1. Covers death, terminal illness, and disability.
2. The flexible payment process of premium.
3. Premium holiday whereby you can skip your premiums for a maximum of three years.
4. Additional payout in the event of an accident.
5. Choose whether you want the death benefit as a lump sum amount or to be paid in monthly instalments.

You can opt for an early exit. This means you can move out of the policy before it expires and get the premiums that you have paid back. There are 3 different plans that you can choose from:

1. Life Shield.
2. Life Shield Plus.
3. Life Shield ROP.

However, there are some restrictions in connection to the early exit value. So, you cannot get back the money if:

1. You get the policy at the age of 50 or before that.
2. Your policy term is more than 35 years.
3. Your age at the maturity of the policy is 68 or more.
4. You already made a claim under the same policy.

So, the affordable premiums, huge range of coverages, riders, benefits, and everything that term insurance has are already there in zero-cost term insurance. Additionally, it wins where the former loses: the return of premium. So, investing in such a policy over decades is definitely worth it.

Also Read: How Can You Avoid Term Insurance Policy Lapse?