When should TROP be taken ?
When should TROP be taken ? TROP or term insurance with return of premium is a type of term insurance where your premiums are returned if you outlive the policy period. The premium rates are slightly higher but you don’t end up losing any money in case a death claim is not made. A TROP plan can be bought at any point in time. However, it is always a good idea to buy a TROP plan earlier on in life and then have it till the time your financial responsibilities last. Once these responsibilities are over, not only will you be freed of paying the premiums, you also end up with a lump sum amount of money which you can use to your advantage.
Which is the ideal time to buy a TROP plan?
Since term insurance, including TROP, is quite affordable, you should buy the TROP plan as soon as you begin earning. There are many advantages of buying the plan earlier in life. First of all, since you are healthy at that point of time, your premium amount will be lower. This is a major reason why you should buy the TROP plan early. The older you get, the more expensive the TROP will be for you. Then, if you buy a TROP plan early and keep investing into it for say 25 years, you build up a good corpus and get a hefty amount of money when the policy terminates.
I have many financial responsibilities. Should I take TROP?
If you have financial responsibilities like paying for your child’s education, parents’ health, paying off loans, etc, you must instantly buy a TROP plan. Not only will the plan ensure the protection of your dependents, it will also build a fund for you. There is another benefit of doing this. Now, with all your financial responsibilities, you do not have the resources to enjoy life the way you want to. But once your responsibilities are over and your policy ends, you will get a lump sum amount of money in the form of the returned premiums. Then you can easily do all the things you couldn’t do in the earlier years, whether it is buying an expensive car or going on a vacation with your spouse.
I recently bought a comprehensive endowment plan. Is this a good time to buy TROP?
If you already have an endowment plan that will secure the future of your family members and also provide for your retirement years, you may not need a TROP plan. In such a case, a simple term plan would be more suitable for you. This is because, since you already have cover, you do not need to unnecessarily pay extra premium for the TROP plan. The simple term plan will take care of your needs and pay a hefty sum assured to your family if you happen to die.
Hence a TROP, i.e. a Term Plan with a Return of premium option can be taken at any point of time provided the right need for the same is established.