No-cost or Zero cost term insurance is the third variant of term insurance offering, other than the usual plain vanilla term insurance plan and term insurance with return of premium option. Primarily, the policy offers similar benefits as in the usual term plan but at no cost to the policyholders. Herein at the policyholder’s will any premium paid towards the policy will be returned back to the policyholder upon policy maturity.
How does this no-cost term insurance work?
Herein the life insurer typically invests the policyholders premium and uses the return to make up for the insurance costs. So, as in the otherwise plain vanilla term plan that requires regular premium payment for maintaining life insurance coverage, zero-cost term insurance offers a cost-effective alternative.
