Zero Cost Term Insurance Plans
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Zero-cost term insurance is a new kind of term insurance benefit that allows policyholders to exit the term insurance at a particular time and to take their premium amount paid to the insurer back. A zero-cost term plan promises insuranceholders the return of their premiums on a fixed date. In layman's terms, you can purchase term insurance at the standard market premium rates, pay the premiums for a set number of years, forgo the policy, and have all your premiums returned at the end of the policy tenure.
However, there is an important catch under the zero-cost term insurance benefit: It offers premium payments back after the GST deductions, which may vary according to tax laws and the insurer. When opting for a zero-cost term insurance benefit, customers cannot opt for the return of premium option. You can opt only for one of the two benefits when purchasing a plan.
Term Insurance Plans: Get Zero Cost Insurance
Let us understand the zero-cost term insurance plan with an example.
Rakesh, a 40-year-old living with his wife and 10-year-old daughter has borrowed a housing loan worth Rs 50 Lakhs. To ensure his family’s financial stability in case of his demise, Mr. Rakesh avails zero-cost term insurance policy with a policy term of 30 years. The family will receive a sum assured of Rs 50 Lakhs in case he passes away. After 15 years Mr. Rakesh’s daughter starts earning and is financially independent. After Mr. Rakesh got good investment returns, he paid off his housing loan and realized he no longer needed the term cover. With the help of a zero-cost term insurance plan that he invested in, Mr. Rakesh now opts to exit the policy and receives the premiums he paid towards the policy back.
| Insurance Providers | Name of Term Plans | Entry Age | Sum Assured | Unique Features | Check Plans |
|---|---|---|---|---|---|
| Max Life Insurance | Max Life Smart Secure Plus | 18 to 65 years | Rs 50,000 to 1 Crore | Return of premiums, Premium breaks, Special exit value | |
| Bajaj Allianz Life Insurance | Bajaj Allianz E-Touch | 18 to 65 years | Rs 50 Lakh to No Limit | Premium holiday option, Get your premiums back, Flexible premium pay | |
| HDFC Life Insurance | HDFC Click 2 Protect Super | 18 to 84 years | Rs 5,000 to no limit | Return of premium, Waiver of premium, Spouse cover | |
| ICICI Prudential life insurance | ICICI Prudential iProtect Smart | 18 to 65 years | N/A | Lower premiums for females, Whole life coverage, Affordable premiums | |
| Canara HSBC Life Insurance | Canara HSBC iSelect Smart 360 | 18 to 65 years | Rs 5 Lakhs to 2 Crore | 3 Plan Options, Child Care Benefits, Spouse Cover |
Zero Cost Term Insurance offers a range of benefits to the policyholders that are mentioned below:
Here are the reasons why you should consider purchasing a no-cost term insurance plan:
A zero-cost term insurance plan has a unique feature wherein insurance holders can exit their term insurance plan and get the return of their premiums. Zero-cost term plan also offers multiple rider options that insurance holders can select. The zero-cost term insurance policy usually has a long policy term of 35-40 years. There are various term insurance companies who are selling zero-cost term insurance such as Max Life Insurance, Bajaj Life Insurance, HDFC Life Insurance, and ICICI Life Insurance.
Term Insurance is a simple and pure protection cover wherein the insurance holder pays the premiums to the insurance providers and gets a life cover. If the insured individual dies, the nominated individual gets the term insurance benefit, which is the assured death benefit to continue a comfortable lifestyle.
There are a few factors that must be considered before purchasing a zero-cost term insurance plan to realize its full potential and benefits.
It is important to understand the mechanics of a zero-cost term insurance plan and read its terms and conditions before making the purchase decision. The plan is designed to safeguard your family against any unfortunate incident and also give you the liberty to leave the policy after a certain policy tenure. However, every insurance provider has different terms and conditions that are essential to understand to plan your finances better.
Zero-cost term insurance policy plans may provide you with a limited coverage amount which is why it is essential to consider if the policy is offering an adequate sum assured based on your financial obligations, and liabilities such as education loans, home loans, etc.
Zero-Cost Term Insurance Plan does provide you the benefit of exiting the policy after a certain policy period. However, before purchasing a zero-cost term insurance policy you must keep in mind that the policy term aligns with your financial goals and liabilities to take full advantage of the potential provided by a zero-cost term insurance.
Zero Cost term insurance plan offers a plethora of benefits to the customers and one of them is an additional array of riders. Riders are additional advantages added to your base policy on a nominal premium charge. These riders may cover accidental death benefits, critical illness benefits, and more. Before purchasing a zero-cost term insurance make sure you consider the optional riders available under a zero-cost term insurance plan.
As lucrative as the name zero-cost term insurance sounds, we know for a fact that nothing is available at zero cost. It is essential to read the terms and conditions of zero-cost term insurance policy thoroughly and make sure there are no hidden charges. Customers must ask these queries to their insurance providers to make a better purchase decision.
Below are the steps to follow to purchase a zero-cost term insurance plan
Given below is the list of documents required to purchase a zero-cost term insurance plan.
Here are the reasons for buying a zero-cost term insurance plan from PolicyX.com:
PolicyX helps you compare a wide range of plans based on their features and choose the one that best fits your requirements.
Buying term plans from PolicyX.com is a hassle-free process as it lets you compare various term plans within 30 seconds.
PolicyX is a leading insurance aggregator that is trusted and loved by customers due to its best services and support.
You can contact PolicyX through email or IVR number and one of their insurance experts will connect with you shortly to address all your concerns.
PolicyX stands with you even in the hardest of times and provides you with dedicated claim settlement support when required.
We have listed below some insurance providers offering zero-cost term insurance to insurance holders with various features and benefits
Zero-cost term insurance is an exceptional plan for individuals who want to offer coverage to their loved ones but also require the flexibility to exit the policy in case they do not require it anymore. It is an apt tool for salaried individuals as they can receive their premiums back and also exit the policy after fulfilling their financial goals. However, individuals must keep in mind that zero cost term insurance plans do not allow you to exit the policy whenever you want, you still have to serve a certain amount of policy period before availing of the smart exit option offered by these plans.
If you are still confused about which zero-cost term plan is best, then you can contact us at PolicyX.com or call us at 1800-420-0269.
No, zero-cost term insurance plans do not allow customers to exit the policy at any given point in the policy period. You can avail of the special exit feature only after a certain amount of years mentioned during the purchase of the policy. Individuals can exit the policy on the basis of terms and conditions laid down by the insurance providers which varies from insurer to insurer.
There are multiple insurance providers that offer zero-cost term insurance plans, such as Bajaj Allianz, HDFC Life Insurance, ICICI Prudential, Max Life Insurance, and more.
No, the major difference lies in the fact that in a return of premium plan, the insured individual will receive all the premiums once the policy term concludes and not before that. Whereas in a zero-cost term insurance policy, you can forego the policy after a specific policy term period depending on the policy and insurance provider selected. Return of premium plan premiums is generally more expensive than zero-cost term plans wherein you don’t have to pay extra in order to avail of a zero-cost term insurance plan.
No, not all insurance providers have designed a zero-cost term insurance plan. However, a large number of insurance companies have started offering this particular variant of plan.
Yes, tax benefits are applicable on premiums paid towards the zero-cost term insurance plans under the Income Tax Act.
Pure-term plans offer financial protection to your loved ones in case of your demise during the policy tenure with no returns of premiums.
While zero-cost term plans offer a return on premiums after a certain period depending on the insurer and the policy.
Yes, zero-cost term insurance is good if you want less financial burden.
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