Term Insurance with Return of Premium

Worried about what will happen to your paid premiums if you outlive your term plan? We suggest, buying a term plan with the return of premium feature. A TROP plan does not let your paid premiums go in vain if you do not pass away during the policy tenure as you get them back after you outlive the policy.

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Term Insurance with Return of Premium (TROP)

Term insurance is a popular choice among Indian buyers because it allows policyholders to obtain a large sum assured at an affordable premium. While a basic term plan might give you lifelong annuities, guaranteed returns for critical illnesses, or different payout options, a term plan with a return of premium plan levels up the plan perks beyond your expectations.

There's only one difference between a basic term plan and a term plan with a return of premium, which is the survival benefit. It is the variant of a term insurance plan that provides payback of the premium paid towards the plan to the policyholder at the end of the policy tenure. Under this plan, the insurer gives the policyholder the survival benefits (minus GST) once the policy matures

Some additional benefits associated with TROP include partial or full disability benefits, accidental death benefits, and guaranteed protections against critical illnesses.

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What is a Term Plan with Return of Premium (TROP)?

As mentioned above, a basic term plan or term plan with a return of premium is quite similar, and they both provide a life cover to the insured person's family members. However, the maturity payout is one feature that sets TROP apart from the regular term plan. Under this plan, the policyholder can receive a return of the premium amounts at the end of the term. It's clear that TROP can bring a sense of overall protection with dual benefits under a single-term plan.

Top Term Insurance with Return of Premium Plans in India

Insurance Providers
Best Term Plans
Claim Settlement Ratio (CSR)
Entry Age
Maturity Age
Check Plans
ICICI Prudential life insurance ICICI Pru iProtect Return of Premium 97.82% 18 to 65 years 85 years
Max Life Insurance Max Life Smart Secure Plus Plan 99.34% 18 to 65 years 85 years
Bajaj Allianz Life Insurance Bajaj Allianz Life eTouch Online Term 99.02% 18 to 65 years 75 years
PNB MetLife Insurance PNB MetLife Mera Term Plan Plus 97.33% 18 to 65 years 99 years
Canara HSBC Life Insurance Canara HSBC iSelect Smart360 Term Plan 98.44% 18 to 65 years 81 years
Aditya Birla Sun Life Insurance ABSLI DigiShield Plan 98.07% 18 to 65 years 55 years
What is Insurance Providers?

Any company that sells an insurance policy is the insurance provider. A good insurance provider has a high CSR, solvency ratio, good customer reviews, a vast product portfolio, and transparency towards its customers.

What is Best Term Plans?

A good term plan consists of various coverage options, flexibility to choose death payout, flexibility in premium payment terms, offers premium discounts, lets you add riders, comes with loaded inbuilt benefits, and is easy on your pocket.

What is Claim Settlement Ratio?

Claim Settlement Ratio is the percentage of claims settled by an insurer compared to the total claims received in a financial year. A good CSR lies somewhere between 95 to 99 percent.

What is Entry Age?

The age (last birthday) at which you buy an insurance policy is your entry age to that policy. Insurance policies usually come with a minimum and maximum age at entry which means that you must attain a specific age or should be less than the maximum age to buy a policy.

What is Maturity Age?

The date at which your life insurance policy ends is known as the maturity age of your policy.

How Does Term Insurance with Return of Premium Work?

Here, we've simplified how a term plan with a return of premium works with an example-

  • Bhanu is a 25-year-old man living a healthy life with no alcohol or history of medical problems and wants to secure his life with a term plan.
  • He buys a return of the premium term plan and pre-decided its sum assured is around Rs. 40 lakhs.
  • However, the yearly basis of the premium for his plan is Rs. 14,000 for a tenure of 50 years.
  • If Bhanu passes away within the policy term, the nominee will get Rs. 40 lakhs coverage.
  • But if Bhanu clears out the policy tenure, he will receive maturity benefits under the return of the premium term plan.
  • After that, the insurer will back the premium paid towards the plan to the Bhanu so that he will get Rs. 7,00,000 (14,000 x 50) upon maturity of the policy.

Why Should You Choose A Term Plan with Return Of Premium Option?

The cost of living has suddenly increased in the past few years, placing a strain on people's wallets. However, a term plan with a return of premium option is an efficient way to manage finances and obtain life security. It is among the popular choice among prospective policyholders because it offers survival benefits, making it an excellent choice. It also provides additional benefits with add-on riders, including waiver of premium, accidental death benefit, disability benefit, and protection against critical illnesses.

Best Term Insurance with Return of Premium Plans 2024

The plan offers coverage for 64 critical illnesses, 360-degree protection, and enhanced safeguarding against accidental death.

Unique Features

  • 4 plan options
  • Live-stage coverage
  • Enhanced protection with riders

iProtect Return of Premium (Pros)

  • Income Benefit Post 60 Years
  • ROP with Life-stage cover
  • Survival Benefits

iProtect Return of Premium (Cons)

  • Income Benefits for a non-smoker
  • No Critical Illness Cover With LP
  • Critical Illness Caused by Sterility and Infertility

iProtect Return of Premium (Other Benefits)

  • Loyalty Discount of 5% & 2%
  • Critical Illness (CI) Benefit
  • Accidental Death Benefit Cover up to 2 Cr

iProtect Return of Premium (Eligibility Criteria)

  • Entry Age -18 Years
  • Max Entry Age- 65 Years
  • Minimum Sum Assured - NA
  • Maximum Maturity Age - 85 Years
  • Premium Payment Term - 5 To 40 Years

Offers financial security and a support system to the policyholder in an emergency. Provides a 5% (up to 200% of the base SA) increment in sum assured after every anniversary of the policy.

Unique Features

  • Terminal Illness cover
  • Premium Payment Choice
  • Joint Life Benefit

The plan provides pure term and health coverage, providing whole life cover and accidental total permanent disability.

Unique Features

  • Waiver of Premium(WOP)
  • Accelerated Critical Illness(ACI)
  • 4 variants

eTouch Online Term (Pros)

  • Shield
  • Shied Plus
  • Shield Supreme

eTouch Online Term (Cons)

  • No Loans Allowed
  • No Surrender Benefit
  • No Maturity Benefit

eTouch Online Term (Other Benefits)

  • Max Sum Assured 2 Cr
  • Sheild Super
  • High Sum Assured Rebate (HSAR)

eTouch Online Term (Eligibility Criteria)

  • Entry Age -18 Years
  • Max Entry Age- 65 Years
  • Minimum Sum Assured - 50 L
  • Maximum Maturity Age - 75 Yrs
  • Premium Payment Term - 10 to 40 Yrs

Offers financial protection to your loved ones and gives the flexibility to customize the plan according to your needs.

Unique Features

  • Tax Benefits
  • Joint Life Cover
  • Critical illness benefit

Mera Term Plan Plus (Pros)

  • Terminal Illness
  • Waiver Of Premium on (ATPD)
  • Accelerated Critical Illness Benefit

Mera Term Plan Plus (Cons)

  • No Policy Discount
  • No Policy Loan Allowed
  • No Maturity Benefit Without ROP Option

Mera Term Plan Plus (Other Benefits)

  • 4 Rider Option
  • 10% Step-up Benefit
  • Rebate on High Sum Assured

Mera Term Plan Plus (Eligibility Criteria)

  • Entry Age -18 Years
  • Max Entry Age- 65 Years
  • Min Sum Assured - 25L
  • Premium Payment Term - SP/RP/LP
  • Maturity Age - 99 years (Whole Life)

Exide Life Smart Term Edge

Smart Term Edge offers significant cover and helps the policyholders to create a strong financial base for their families in case of any eventuality resulting in the death of the policyholder.

Unique Features

  • 3 plan options to choose from
  • Up to 150% return of premiums on maturity
  • Flexible premium paying modes

A Non-Linked, Non-Participating, Individual, Pure Risk plan that offers 3 plan options with steady income benefits.

Unique Features

  • Life cover till 99 years
  • Child Care Benefit option
  • Income Benefit after 60 years

iSelect Smart360 Term Plan (Pros)

  • 3 Plan Options & Spouse Cover
  • Accidental Death Benefit
  • Accidental Total & Permanent Disability

iSelect Smart360 Term Plan (Cons)

  • No Policy Loan Allowed
  • No Maturity Benefit
  • No Benefit On Revival

iSelect Smart360 Term Plan (Other Benefits)

  • Critical & Terminal Illness
  • Option To Block Your Premium
  • 5% Loyalty Discount

iSelect Smart360 Term Plan (Eligibility Criteria)

  • Entry Age -18 Years
  • Max Entry Age- 65 Years
  • Minimum Sum Assured - 25 L
  • Maximum Maturity Age - 81 Yrs
  • Premium Payment Term - RP/SP/LP(5&25 Years)

The term plan offers coverage for 42 Critical Illnesses, along with the ability to enhance coverage through optional riders.

Unique Features

  • 6 Rider Options
  • Enhanced Life Stage Protection
  • Coverage Till 100 Years of Age

ABSLI DigiShield Plan (Pros)

  • ROP with Life Insurance Cover
  • Level Cover with Survival Benefit
  • Level Cover plus Income Benefit

ABSLI DigiShield Plan (Cons)

  • 48 Months WP for Critical Illness
  • 12 Months WP For Suicide Cover
  • No Coverage Beyond Critical Illness List

ABSLI DigiShield Plan (Other Benefits)

  • Sum Assured Reduction Cover
  • Inbuilt Terminal Illness Benefit
  • Spouse Cover under Joint Life Protection.

ABSLI DigiShield Plan (Eligibility Criteria)

  • Entry Age - 18 years
  • Max Entry Age - 65 years
  • Minimum Sum Assured - 30 L
  • Maximum Policy Term - 55 years
  • Premium Payment Term- RP/SP/LP

Benefits of Term Insurance Return of Premium

As insurance plans are specifically chosen on the basis of their benefits, then Term Insurance Return of Premium also offers a set of advantages to the insured, such as:

Death Benefit

Like a standard term insurance plan, Term Insurance Return of Premium offers a death benefit where the sum assured amount is given to the nominee assigned by the policyholder.

Survival Benefit/Maturity Benefit

This plan stands unique with this differentiating factor. Term Insurance Return of Premium allows the survival benefit or popularly known as maturity benefit where the policy is returned the entire premium amount during the policy.

Tax Benefit

Investing in Term Insurance with Return offers a proposition to save tax under 80C of the Income Tax Act, 1961 where the premiums paid for the policy are eligible for tax deductions of up to Rs. 1.5 lakhs per annum. Additionally, the sum assured payout to the beneficiary is exempted from income tax under Section 10 (10D) of the tax laws

Surrender Value

Term Life Insurance with Return of Premium gives freedom to surrender the insurance plan to the policyholder if he/she plans to discontinue the plan. In that scenario, the surrender value is given to the policyholder depending upon the payment done by him/her.

Who Should Buy Term Plans with Return Of Premium?

We understand that making a selection for any plan or its benefits is always crucial to leverage the maximum profit of the plan. Likewise, it is also important to understand that who should take the Term Insurance Return of Premium plan.

  • Unmarried If a person is single with no dependents or responsibilities such as wife or kids then Term Insurance with Return of Premium can be beneficial for him/her as it will work like an investment that the person can get during the late years of life.
  • No long-term responsibilities: If a person knows that he/she will have no responsibilities during old age such as a loan or burden of kids' education or wedding as they are settled in their lives and are independent. Then a person can go for the Return of Premium Term Insurance plan wherein he/she can take the benefit of the premium paid during the policy tenure.
  • Married with kids: Also Term Insurance Return of Premium can be useful for those who have a huge set of responsibilities and are aware that they might need money after 40-50 years of duration. Then this premium received back in the form of maturity benefit can help them in surviving that crucial time.

Pure Term Insurance vs Return of Premium - A Quick Comparison

Pure term insurance and the return of premium are variants of term insurance that come with their own set of extra perks and limitations. So, it takes a lot of work to select which one buyer should purchase. Here, we've simplified the comparison between pure term insurance and the return of premium to help buyers end their confusion.

Pure Term Insurance Plan Term Plan with Return of Premium (TROP)
Definition It is a part of life insurance that provides life coverage for a specific term. Under this plan, buyers only get death benefits and don't receive survival benefits if they complete the policy tenure. It is one of the variants of term insurance where the policyholder receives life coverage for a specific term. Under this plan, the insured person opts for both Death Benefit + Survival Benefit.
Surrender If policyholders surrender their policy before the tenure, their cover will be ceased, and they end up getting nothing. If policyholders surrender their policy before the tenure, their cover will be ceased, and they will get a small amount of the premium paid.
Tax Benefits Under this plan, policyholders get these benefits:-
Sec 80C - Premium paid eligible for a tax deduction
Sec 80D - Critical illness add-on rider eligible for a tax deduction
Sec 10(10D) - Death benefit is tax-free
Under this plan, policyholders get these benefits:-
Sec 80C - Premium paid eligible for a tax deduction
Sec 80D - Critical illness add-on rider eligible for a tax deduction
Sec 10(10D) - Death benefits and maturity benefits are tax-free
Cons Keep that in mind: the premium will keep increasing as the policyholder's age increases, and no maturity benefits will be paid if the insured person clears the policy tenure. age increases, and no maturity benefits will be paid if the insured person clears the policy tenure. The premium is expensive as compared to the basic term plan. However, the premium will keep increasing as the policyholder's age increases, but you'll receive a refund of all the premiums paid if you outlive the policy tenure.
Who should buy it? To protect your family members financially in case of your demise so your loved ones can freely manage their finances in your absence. If you're living a healthy lifestyle with no medical history or harmful addiction, then you should consider buying a term insurance plan with a return of premium.

Conclusion

Term Insurance with Return of Premium is a great option for the people who are looking for protection for their families as well as an investment plans for themselves. Thus this plan gives a complete win-win situation to the policyholder by giving one or another benefit.

Term Insurance Return of Premium: FAQs

1. What are the reasons for the return of premium in insurance?

A term plan with a return of premium provides for a refund of the premiums paid on a term life insurance policy if the policyholder doesn't die during the policy tenure.

2. What is the disadvantage of the return of premium in term insurance?

Although the return of premium life insurance refunds your money, but it's a lot costlier than a traditional term life insurance policy.

3. Does the return of premium in term insurance have tax benefits?

Yes, the return of premium in term insurance has tax benefits under Section 80C and 10(10D) respectively of the Income Tax Act, 1961.

4. How do you calculate the return of the premium?

To calculate the return of premium in term insurance you have to subtract the sum of all premiums from the maturity benefit amount, you will get your net returns.

5. Which type of insurance would be used for a return of premium rider in term insurance?

Term insurance has a return of premium rider which is generally offered as a separate endorsement but few insurance companies have specific policies that already include the built-in benefit of a return of premium rider.

Term Insurance Companies

Check and compare plans from 21 IRDAI-approved term insurance providers before purchasing a term plan.

What Our Customers Have to Say

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Sanjeev

Hyderabad

May 20, 2024

SUD Life term plan truly stands out my expectations as I got SUD Life term plan along with additional riders at very affordable premiums.

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Coimbatore

May 20, 2024

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Delhi

May 20, 2024

Bought SUD Life Family Income Benefit Rider plan to secure the future of my plan financially even in my absence.

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May 20, 2024

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Indore

May 17, 2024

PolicyX’s dedicated support made renewing my Bandhan Life Insurance policy easy. I’m absolutely delighted with the service offered by PolicyX Insurance Advisor.

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Bhopal

May 17, 2024

After getting advice from the PolicyX experts, I chose a Bandhan Life Insurance term plan. Thank you, PolicyX, for helping me buy a term plan at such a low premium.

Sahil Singh Kathait

Written By: Sahil Singh Kathait

Sahil is a passionate content writer with over two years of expertise in the insurance domain. He uses his knowledge in the field to create engaging content that the customer can relate to and understand. His passion lies in simplifying insurance terminology, ensuring a hassle-free understanding for potential policyholders. With his outstanding collaborative efforts with people, he understands different perspectives and keeps readers' viewpoints at the forefront of his content writing approach.