Zero Cost Term Plan: Protect your family without spending a penny

Zero Cost Term Insurance, also known as No Cost Term Insurance, is a kind of life insurance which provides high coverage benefits at zero cost to the policyholder. The premium paid throughout the policy tenure is returned back to the policyholder at the time of maturity. It is a cost-effective planforpolicyholders, which provides financial security to family members at no additional costs. 

Since thepremium is returned at the time when the policy matures, this plan offers an affordable premium option to the policyholders looking for wide insurance coverage. It provides flexibility in terms of duration, amount covered, and payment options, allowing the policyholders to customise the plans as per their needs.

Difference Between Zero Cost Term Plan and TROP

Term insurance is the simplest kind of life insurance plan that provides life coverage, further protecting the family of the policyholder. In case of the sudden demise of a policyholder, the family members will get life coverage that will include a predetermined amount as death benefits.

If you go by the Term Insurance Meaning, there are some differences between a term insurance with a return on premium and a zero-cost term plan.

Return of Premium plan	Zero Cost Term Plan
It charges a high premium from the policyholder.	It charges a lower premium, creating a suitability for salaried individuals, letting them meet financial burdens and save money.
It offers death benefits if the death of the insured occurs; it provides maturity benefits in terms of a refund of the premium.	Policyholders are provided with an option to continue to pay for the plan or get the premium amount back early.
It is best suited for self-employed individuals.	It is best suited for salaried individuals.

Features of a Zero-Cost Term Plan

• Affordable Premiums: A zero-cost term plan is a cost-effective plan that charges a lower premium.

• High Coverage: This plan offers financial security to the nominees of the policyholder with considerable death benefits.

• Multiple Policies: One can buy multiple policies, which comprise coverage of customised plans.

• Zero Cost : It eliminates the payment of premiums after a specified time period, which helps reduce financial obligations.

• Conversion Options: A policyholder can convert their term plan into a life insurance plan within a specified time span. 

• Flexibility: Get flexibility in the coverage amount and an option to add additional riders as per your requirements.

• Tax Benefits: Get tax benefits on the amount of premium paid, which helps save funds.

Things to be considered before buying a Zero Term Insurance Plan

Provided things should be kept in mind before buying a Zero Cost TermInsurance Plan:

• Coverage Amount: Calculate the family’s financial requirements to assess the coverage amount that would be adequate to fulfil the expenses in the absence of a policyholder.

• Understanding the Policy :Before buying a zero-cost term plan, a policyholder should read the terms and conditions of the policy, coverage details, maturity terms, etc.

• Policy Tenure: Consider the policy tenure, which should align with the policyholder’s financial obligation and safety requirements.

• Premium Payment: As we know, there is no premium to be paid in a zero-term plan; hence, a policyholder should assess additional fees or charges associated with the plan.

• Insurance Company: Look for a financially reputable insurance service provider that has a good claim settlement ratio.

• Additional Riders: Check if additional riders, like accidental death, critical illness, etc., will enhance the coverage amount and can be tailored as per the requirements.

Limitations of Zero Cost Term Insurance Plan

• Limited Coverage : There may be limited coverage as compared to traditional plans, which may be due to no premium payments. 

• No Maturity Benefit: There is no maturity benefit, unlike some life insurance plans. Also, it does not offer any return on investment in case the policyholder survives the policy tenure.

• Strict Surrender Policies: It charges penalties or loss of coverage in case of exiting the plan, depending on its terms and conditions.

• No Investment Component: There is no investment component like the traditional ones with TROP. 

Documents Required to Buy a Zero-Cost Term Insurance

Provided is the list of documents required to purchase zero-cost term insurance:

• Identity Proof, such as an Aadhar Card, Voter ID, PAN Card, or Passport.
• Address Proof, including Aadhar Card, Utility Bills, Voter ID and Driving Licence.
• Income Proof, including salary slips, Bank Statements or income tax returns
• Age Proof, such as a birth certificate or school leaving certificate
• Medical check-ups documents
• The latest Passport photographs
• Any other documentsrequired to complete the application process.

Steps to Purchase a Zero-Cost Term Insurance Plan

Step 1: Assess the total amount of coverage required and the policy tenure as required.

Step 2: Launch the insurance provider’s website to explore the various plans available. You can also contact customer care about this.

Step 3: Under the option “Term Insurance”, choose the type of policy to opt for.

Step 4: Choose a policy from the available options, then click the tab “Explore Plan”.

Step 5: Once the plan has been finalised, click on the option “Buy Now”.

Step 6: Fill out the application form with the details, such as name, contact details, date of birth, etc.

Step 7: Submit the application form along with the documents needed to be attached.

Step 8: At last, you are required to pay the applicable fees and charges, if any. 

Conclusion

Zero Cost Term Insurance is a distinctive insurance plan designed for individuals planning to get life coverage without paying any premiums. With this plan, one can get life coverage at an affordable price, along with tax benefits. This is best suited for the salaried class of individuals, letting them have mental peace.

Hence, zero-cost plans are a superb option for those who want to provide financial security to their family members with an option in hand to quit the policy whenever the purpose of availing the plan is accomplished. Though they cannot be quit at any point, one must fulfil a minimum time period before exiting.