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Term insurance is an important necessity for the breadwinner of the family. It is crucial to be prepared for the uncertainties of life. Term insurance plans provide financial protection to the family of the policyholder in case the policyholder dies during the policy period. Despite knowing that term insurance is an essential cost, many people think that term insurance is a waste of money as they would not be getting back anything upon survival at the end of the policy term. 

Traditional term insurance plans do not pay anything in return if the policyholder survives the policy period. That is when the insurance companies have introduced the term insurance variant that returns the premium at the end of the policy term if the policyholder survives the term.

However, this return of the premium term plan comes at a higher cost, almost double that of a regular term plan. The glitch in a return of premium term plan is that the policyholder can get back the premium only at the end of the policy term, and the policyholder needs to continue the premium payment (even after retirement) till the end of the policy term. This is when the new return of the premium term plan variant has been introduced with a special exit feature known as a ‘zero cost term insurance plan’.

What is Zero Cost Term Insurance Plan?

Zero cost term insurance plan is a new variant of return of premium term insurance plan that allows you to exit the policy at a specific life stage even before the end of the policy term and get back all the premium that you have paid after deducting the GST. Usually, zero-cost term insurance plans are long-term insurance policies, and the insurer allows the exit only after a certain number of policy years. 

For example, you have purchased a zero-cost term insurance plan at 30 for 35 years. Let’s say after the completion of 30 years of the term. You feel that you are free of all the responsibilities, and there is no need for insurance coverage. You can exit before the term's completion and get back all the premiums that were paid for the last 30 years (after the deduction of GST). Zero-cost term insurance plans are relatively cheaper than the return premium term plans. 

In a nutshell:

Considering the cost-effectiveness and the unique feature of special exit benefits, zero-cost term insurance plans can be a great choice to secure your family’s financial future.