Pure term life insurance does not offer cash value upon maturity. However, certain variations like Return of Premium (ROP) term plans and Whole life insurance plans do provide cash benefits at maturity. Understanding the differences between these policies and how cash value works can help you choose the right term life plan for securing your family.

Term Life Insurance plans with Cash Value

Let’s elaborate a bit more on these plans

Whole life insurance plans

This term plan typically provides coverage for the rest of your life. This plan typically protects you and your family members by providing you coverage for up to 99 years.

Term Plans with return of premium (ROP)

These plans will return all the premiums paid by you at maturity if you survive the policy term.

Methods to Access Cash

Maturity Benefits:

• 1. In plans with return of premium, you will receive all the premiums paid at the end of the policy term based on the terms of your plan.
• 2. In whole life policies, you receive the accumulated cash.

Policy Loans:

• 1. You can take loans against your whole life insurance plans. You can borrow against the cash value, but unpaid loans can reduce the death benefit.

Surrendering the Policy:

• 1. In case of any financial emergency, you can surrender the policy and terminate the plan. But the surrender value may incur fees and taxes.

When to choose a term life plan with cash value?

A basic term plan does not offer any cash value upon maturity of the policy. So, if you wish to get back some cash value from your term plan upon surviving then you should consider these plans. Since these plans offer cash value, the premiums would be a bit higher compared to pure term plan.

Conclusion

Pure term insurance is an excellent choice for affordable, high-coverage protection without a maturity benefit component. However, if you’re looking for a term policy that combines coverage with maturity value, options like return of premium or whole life insurance may suit your needs.

COMP/DOC/Feb/2025/52/8357