Term Insurance with Return of Premium

Get covered and get your money back! Opt for the return on premium option in term insurance. Click to explore now!
Check Life Insurance Policies
3 min
02 Sep 2024

Term insurance ensures that the life goals of policyholders do not derail, and the family is financially secure in their absence. It guarantees a pre-determined payout in case of a policy buyer’s death. However, if policy buyers survive the policy, they will not receive any financial protection, and the insurance plan will simply cease to exist.

In this regard, term insurance is a life cover with zero loss--get return on premium option in term insurance that ensures financial protection and refunds your premiums. Check Plans! And, keep reading to understand what precisely this insurance plan is and the benefits of opting for it.

What is a term insurance plan with return of premium (TROP) plan?

Unlike a regular term plan, term insurance with a return of premium comes with an added benefit. It extends survival benefits to the policy buyers. So, if the insured survives the policy term, insurer will return the premium paid towards the policy. You will get the premium after a few necessary deductions of charges and taxes as per the terms and conditions under the policy. Even in case of the insured’s demise, his or her family will receive the sum insured.

Explore: Term insurance calculator

How does a term insurance with return of premium work?

Here is an example below to understand how it works to maximise financial coverage:

Suppose you have opted for a term plan of Rs. 30 lakh against tenure of 10 years. Your annual premium amount will be Rs. 3,000.

  • Now, in case of unfortunate death, your family will get the entire amount of Rs. 30 lakh.
  • In case of a return of premium plan, there is a benefit if you survive the entire policy term. In the example discussed above, as a survival benefit, you will receive a premium of Rs. 3,000 X 10 years.

This makes it a non-participating insurance plan. It extends either survival or death benefits to the insured or his or her family.

Term Insurance—big coverage, affordable premiums! Secure your family’s future with affordable protection. Click now to get insured!

What are the benefits of term insurance with returns of premium?

A term insurance plan with a return of premium is an apt choice to secure your family and get premium returned. Though it comes against a higher premium than a regular plan, it offers the following benefits:

1. Guaranteed returns

Unlike other life insurance plans whose returns depend on the market conditions, term insurance with return of premium offers assured returns. However, policyholders may receive any profit from the insurer through their investment.

2. Death covers

This insurance cover comes with a payback of the investment. This makes an ideal option for individuals who want to get a refund of premium at maturity, in both cases of survival or death. With a term plan with returns of premium, one can be rest assured of complete financial protection for one’s family.

3. Affordable option

If you require a term plan that guarantees financial coverage in your absence, term insurance with return of premium is an affordable option. Moreover, it is probably among the more cost-effective options for extending survival and death benefits.

4. Additional rider options

One of the biggest benefits of a term plan is if you can opt for an array of specific riders. Modify your term plan as per your requirements and exclusive to your policy. Moreover, reputed insurance companies provide add-on covers such as critical illness rider, personal accident, or disability riders. With these options, you can affirm complete financial coverage against illnesses.

5. Tax benefits

A term plan is beneficial as it ensures tax benefits under Section 80C of the Income Tax Act. You are eligible to receive a tax-deductible of up to Rs. 1.5 lakh against the premiums paid towards the policy. Furthermore, under Section 10 (10D) of the Income Tax Act, you will receive tax benefits on the payout from the insurance company.

Comprehensive coverage, affordable premiums, and tax savings—term insurance gives you more than just security. Compare plans now!

Who can buy a Term Plan with Return of Premium (TROP)?

Following are the common eligibility criteria for getting a term plan with return of premium:

  • Individuals aged 18 to 65 are generally eligible for a term insurance with return of premium.
  • The applicant must meet the insurer’s health and income criteria.
  • Non-smokers and those with a healthy lifestyle may receive better premium rates.
  • Policyholders can choose a coverage period, typically ranging from 10 to 30 years.

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Tips for choosing the most suitable term insurance with return of premium

Following are the tips to help you choose the most suitable term plan with return of premium to secure your financial future:

  • Evaluate your financial goals and select a term insurance plan with return of premium that aligns with them.
  • Compare premium costs across different insurers for the same coverage.
  • Check the insurer's claim settlement ratio for reliability.
  • Consider additional riders for enhanced coverage, such as critical illness or accidental death benefits.

As term insurance involves cash-value policies, one needs to look for the best-suited features and benefits at their convenience. Therefore, individuals must thoroughly compare the options available, ensuring impressive returns and multiple riders against cost-effective premiums.

Get term insurance for all-round protection—financial security, tax benefits, and peace of mind. Compare and Get Quote!

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Frequently asked questions

What does term insurance with a return of premium mean?

Term insurance with a return of premium is a policy where, if the insured survives the term, all paid premiums are refunded, providing both coverage and a savings component.

What kind of term coverage do return of premium plans offer?

Return of premium plans offer standard term insurance coverage, providing a death cover to beneficiaries during the policy term, with the added feature of returning all premiums paid if the policyholder outlives the term.

What are return of premium charges?

These are additional costs included in the premium to fund the refund benefit.

What advantages does a term insurance plan with a return of premium offer?

A term insurance plan with a return of premium provides financial security and refunds all premiums paid if the policyholder survives the term. It combines protection with savings, making it a beneficial choice.

Is purchasing a term plan with a return of premium a good decision?

Opting for a term plan with a return of premium is suitable if you seek both life coverage and guaranteed maturity benefits. It ensures financial protection while also refunding your investment.

How does term insurance differ from term insurance with a return of premium?

Standard term insurance offers only a death cover, whereas a term plan with a return of premium refunds the total premium paid if the policyholder outlives the policy term.

What payout options are available under term insurance with a return of premium?

The payout options may include a lump sum payment, monthly instalments, or a combination of both, depending on the insurer’s terms and the policyholder’s preference.

Can you receive a refund from a term insurance plan upon maturity?

Yes, a term insurance plan with a return of premium refunds the total premiums paid if the policyholder survives the policy term, ensuring a financial benefit at maturity.

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*T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Life Insurance Corporation of India (LIC), Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Company Limited, HDFC ERGO General Insurance Company, TATA AIG General Insurance Company Limited, ICICI Lombard General Insurance Company Limited, New India Assurance Limited, Chola MS General Insurance Company Limited, Zurich Kotak General Insurance Company Limited , Star Health & Allied  Insurance Company Limited, Care Health Insurance Company Limited,  Niva Bupa Health Insurance Company Limited, Aditya Birla Health Insurance Company Limited and Manipal Cigna Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services.  Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company.

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