What does it do?
This policy pays sum assured in case of unfortunate demise of the life assured and refunds premium on survival.
On survival, the premiums are returned in two parts:
a) Mid term benefit: If insured person survives half the policy tenure, the insurance company returns 40 per cent of regular premium or 20 per cent of single and limited premium, excluding any extra premiums paid for riders.
b) Maturity benefit: If policyholder outlives the policy term, the insurance company refunds the remaining premium excluding any extra premiums paid for riders.
The policy also offers accidental rider for an added coverage. Policyholder is free to surrender the policy after specific number of policy years that depend on the premium payment mode.
If policyholder does not pay premiums after 3 years under regular premium mode or after 2 policy years under limited premium mode policy, the policy will not lapse but acquire a paid-up value.
This paid-up value is paid to the nominee on death of the policyholder or to the policyholder if he survives to maturity.
Pros
Policyholder is allowed to surrender the policy.
This plan refunds premiums paid to the policyholder.
The policy acquires a paid up value on non-payment of premiums.
It gives premium discount to female applicants.
It offers riders to enhance coverage.
Premiums qualify for taxation benefits.
Cons
Return of premium option comes at a higher cost.
