Free of Cost Term Insurance

A term plan with free of cost special exit value~¹ can be defined as a type of term insurance policy with an add-on wherein the premiums that have already been paid by the policyholder during the policy term are returned when the policy term ends.

This implies that the life insured enjoyed all the benefits of term plan including death benefit during the policy tenure and at the end of the policy term, the premium paid is refunded to the policy holder. So, effectively the benefits of the term plan were availed by the policyholder at minimal cost.

The amount that is refunded to the policyholder is on the basis of special exit value^~1, and this benefit is typically offered as an add-on to regular term plans with an additional premium being charged for this benefit. However, one should keep in mind that the premium refunded as per the special exit value~¹ clause does not include the GST payments made along with the premiums during the policy term.

Special exit value~¹ is the feature which allows the premiums paid during the policy term to be refunded at the end of the term plan tenure. This allows the policyholder to exit from the policy in a specific window and receive a refund for the policy premiums that have been already paid. Typically, such a refund of premiums through special exit value~¹ benefit is exclusive of GST paid and an additional premium amount may need to be paid in order to get this this add-on benefit.

Let’s understand how this works with an example. Suppose you have bought a term plan with special exit value~¹ benefit with cover till the age of 65 years. In such a case you might have a window of up to 5 years i.e. after you are 60 years old till the policy matures to avail the special exit value~¹ benefit. Once this refund of previously paid premiums is processed, the policy will be terminated and you can no longer avail the benefits of the term plan.

One way to determine when you would want to avail the term plan with free of cost special exit value~¹ that pays premiums back is to approximate the time by which you all your debts will be paid off and your dependents might become self-reliant. This way, you’d be able to exit from the policy and save on the premiums you had already paid for the term plan.

Below-mentioned are some of the prime features of a term plan featuring the special exit value~¹ add-on:

The benefits of a term plan with free of cost special exit value~¹ that gives premiums back are directly proportional to its features, viz.:

Just like any other term plan, term plans with special exit value~¹ also feature few limitations that prospective policyholders need to be mindful of. Some key limitations of a term plan featuring special exit value~¹ at no additional cost to keep in mind include:

Keep in mind a few things before you go ahead and decide on purchasing a term insurance policy with special exit value~¹:

Since a term plan with free of cost special exit value~¹ that pays premiums back is a variation of a traditional term insurance policy, you are required to submit some standard KYC documents to purchase the policy. Examples of such documents include: