Zero premium life insurance

Probably no company would offer zero premium life insurance package to any person. But you do find many insurance advisors aggressively promoting the concept of such a life insurance. The common man is wary about such a product and is definitely cautious about any such promotion. This life plan is normally meant for senior citizens in the age group of 60-85 years. The product on offer is permanent or universal insurance covering life with an inbuilt system where a part of the amount goes towards the policy holder’s funeral premium settlement of debts, and a part of the amount goes to beneficiaries. It is the seniors, who are, most of the time, concerned about the welfare of their spouse and family after their death; and they do not want to leave their loved ones with zero benefits.

The main idea of going in for a zero premium life insurance would be to provide financial security for your family members and those who are financially dependent on you. These plans offer other benefits and advantages. The death benefit paid to the nominee or beneficiary is tax free and the policy holder is eligible to borrow money against the policy. Similar to whole life insurance plan, this scheme is attractive as it accrues a cash value that grows at a definite rate.

An advisor of the insurance company visits the senior citizens, who have a reasonable amount of regular income, and explains the benefits of the plan. If the potential customer expresses his interest, the advisor goes ahead with the plan. The plan is also termed as Return of Premium Life Insurance, for the reason that the policy holder gets back the entire amount that has been paid by him as premium if he survives the policy period. It is an excellent way for investment, apart from keeping the family protected in case of misfortunes.

The seniors have been advised and cautioned about the unsolicited misinformation and misrepresentation of such zero payment schemes by some of the unscrupulous insurance companies, which has sent out wrong signals to these citizens. They have been advised to be careful and not to fall into such pitfalls.