Zero-cost term insurance plans: What is the actual ‘cost’ of these policies?

Did you know that there is a new variant of the term life insurance cover which can be zero-cost for you?

In a zero-cost term insurance plan the policy holder has the option to exit the plan at a certain age and get all the premiums that he has paid minus GST.

Zero-cost term plans are targeted atthose who buy insurance only with a return
The zero-cost term policies are aimed at the segment of customers who fear that if nothing unfortunate happens, they would be wasting the premiums paid for regular term insurance, say industry experts. If the policy holder chooses the exit option in these plans, they become zero-cost plans for them.

“A zero-cost term insurance plan is for individuals who have built enough assets and met all their life goals while still in their fifties, and he or she may not need life insurance anymore," Satishwar Balakrishnan, Managing Director & Chief Executive Officer, Aegon Life Insurance.

This policy is specifically targeted to encourage people who do not buy term insurance because there is no return on surviving the policy term,” he added.