What is TROP or Term Plan with Return of Premium?
A term plan with a return of premium works the same way as a term insurance plan, offering a risk cover to the policyholder and their family. However, the main distinction between a term insurance plan and a term plan with a return of premium is the maturity benefit offered by the latter.
Under a term plan with a return of premium (TROP), you will be eligible for a return of the premiums at the end of the policy term, if you survive that period. Like a pure term plan, a TROP also offers death benefits to the policyholder’s family in the event of death. Hence, a term plan with a return of premiums offers dual benefits under a single insurance plan.
While pure risk term insurance plans are meant for those seeking to protect their loved ones’ financial future, term insurance plans with return of premium also serve the same purpose but with the added benefit of receiving the sum of all the paid premiums on maturity, subject to the policyholder surviving the policy term.
However, it is important to know that the premiums you pay towards a TROP policy will be slightly higher than that of a pure term insurance plan. This is why it is advisable to choose a TROP that enables you to pay reasonably priced premiums and enjoy the policy's coverage is advisable. And like a term plan, the TROP should also offer sufficient coverage to your family so that their financial future can be well-protected.