HomePersonal FinanceLife InsuranceWhat are Zero-Cost Term Plans?

What are Zero-Cost Term Plans?

A term plan is a good choice to make for your life insurance policy if you want to insure your family. Many insurance providers have upgraded term insurance plans into zero-cost term plans. The benefits of the zero-cost term insurance plans are higher than the regular term insurance plans.

For example, term insurance plans have some benefits, but zero-cost term insurance plans are fixed with the return of premium benefit option. The policyholder of the zero-cost term insurance plan can get the benefit of their insurance premiums returned to them if they plan to discontinue the term insurance plan. If you opt for a generic term insurance plan, you will not be able to get back the invested money, which can be a financial problem.

So, it is better to opt for a zero-cost term insurance plan over others. Moreover, it is best if you ask your insurance agent or advisor about this kind of special plan. The insurance agent can suggest the best zero-cost term insurance plan that will maximize your savings and the benefit of this kind of plan.

zero cost term plans

What are the Features of The Zero-cost Term Insurance Plan?

Sometimes, you pay premiums for the term insurance plan but realize that you do not need term coverage anymore. In such situations, you will be financially safe if you invest in a cost-term insurance plan. The zero-cost term plan means that you will get all the invested money back if you cancel the policy coverage. It is like double insurance coverage and no loss of money if you do not want the insurance policy after some years. This is a good choice to make if your life goals shift towards your later years.

The features of the zero-cost term plan are as follows:


The zero-cost term plan offers insurance coverage to specific policy tenures. For some years, ten or more, the zero-cost term plan offers insurance coverage. The insurance coverage of the plan is specific for the no-cost term plan, just like any other term insurance plan.

If you pass away right after completing your term plan your family will get all the benefits of the plan. However, if you don’t complete the term plan or cancel the policy, you can get the term premiums back.

Long Term

The zero-cost term insurance plan is for the long term. Insurance companies know that people are living longer now and have access to good healthcare. So, the term insurance policy should also offer long-term coverage. The long-term coverage that you want can be through the zero-cost term insurance plan.

The zero-cost term insurance plans can often be valid till 99 years of age. So, even if you live till your late 90s, the term insurance plan comes in handy for your family and dear ones. If you want a single insurance policy to cover your financial liabilities even after your death, the zero-cost term plan is a good one to choose.

Regular And Premium

The zero-cost term insurance plan also offers the benefits of a regular insurance plan and the benefit of reducing the premium risk by returning the money when the insurance plan is canceled. So, there are additional benefits at the premium level that you get by opting for the zero-cost term insurance plan. You can use the term plan calculator to know what amount of premium you need to pay.

Save Money

‘The biggest selling point of the zero-cost term insurance plan is probably its economical nature. The insurance plan is a good option if you want a fail-safe way of investing your money. You will get tax benefits if your policy matures. If your policy is canceled, you will get your money back.

Either way, you get an economic advantage when you opt for the zero-cost term insurance plan. No one likes to waste money, so the option of a cost-term plan is a good one for anyone across income groups. If you are a salaried employee, the option of a no-cost term insurance plan is a lucrative one.


If you are looking to invest in a good-term insurance plan, you should weigh all your options and avenues before confirming with your agent. Choose a good agent and a plan that protects you from liabilities and losses.

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.