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Term insurance with return of premium (TROP) is similar to a pure term insurance plan with the added return of premium benefit. A term plan with return of premium offers financial protection to your family members in case of your demise, but you get all your premiums (excluding GST) back if you survive the policy term.
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A term insurance plan with return of premium is a type of term insurance that provides life cover to nominees or beneficiaries like a pure term plan, but it also provides a payout at the end of the policy term.
Simply put, if the life assured survives the policy term, he/she will get back all the premiums paid. However, the beneficiary/nominee will receive the life insurance payout if they pass away during the policy term. This plan is great for anyone seeking a savings plan with life insurance coverage. It is also helpful for those who want to secure financial support for their family if they are not around.
Based on your financial needs, you can choose the best term insurance with return of premium for your family.
This plan is right for you if you want life insurance to protect your family and, along with that, wish to receive the premium amount back when the policy matures.
Flexible options to pay premiums
Return of total premium amount paid at the end of the policy term.
Term Plans
Below mentioned are the best term insurance with return of premium plans:
| Insurance Company | Term Insurance plans | Entry Age | Max Maturity Age | |
| ICICI Prudential Life Insurance | iProtect Smart | 18-65 years | 99 years | |
| HDFC Life Insurance | Click 2 Protect Super | 18-65 years | 85 years | |
| Axis Max Life Insurance | Smart Total Elite Protection | 18-65 years | 85 years | |
| Tata AIA Life Insurance | Tata AIA Sampoorna Raksha Promise | 18-65 years | 100 years | |
| Bajaj Allianz Life Insurance | eTouch Plan | 18-55 years | 99 years | |
| PNB Metlife Life Insurance | Mera Term Plan Plus | 18-50 years | 80 years | |
| Canara HSBC Life Insurance | Young Term Plan - Life Secure | 18-45 years | 99 years | |
| Kotak Life Insurance | Kotak e-Term | 18-65 years | 85 years | |
| Edelweiss Life Insurance | Zindagi Protect | 18-65 years | 100 years | |
| Bandhan Life Insurance | iTerm Prime | 18-65 years | 70 years | |
| Aditya Birla Sun Life Insurance | ABSLI Income Suraksha Plan** | 21-55 years | 70 years | |
| SBI Life Insurance | SBI eShield Next | 18-65 years | 100 years |
*Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in
*You can use a term insurance premium calculator to check the estimate of the premiums you need to pay regularly for the desired life cover. You can also use the HLV Calculator to know the ideal life cover.
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Let’s understand how a term plan with return of premium works:
Mr Sharma is a 25-year-old salaried male who wants to save money while having life insurance to ensure his family members get financial support in his absence. He chose a Term Plan with Return of Premium (TROP) with an annual premium of Rs 13,763, a sum assured of 1 crore, and a policy term of 30 years
This simply means Mr Sharma will pay Rs. 13,763 every year for 30 years. There are 2 cases:
Case 1: Mr Sharma dies within the policy term
In case he dies within the policy term, then his nominee or family members will get the sum assured of Rs 1 Crore.
Case 2: Mr Sharma survives the policy term
If he survives the policy term, he will get the entire premium amount paid throughout the term i.e., (13,273 X 30 = …..) with interests and other extra bonuses based on policy terms.
When it comes to fulfilling financial commitments like buying a term plan with return of premium (TROP), every individual may have different goals. Selecting this plan depends on age, income, lifestyle, and health conditions. Evaluating your financial situation based on these criteria is crucial for choosing the right plan. TROP Plans can be a good choice for people falling under these categories if you are planning to buy them.
Unmarried: If unmarried, you may have specific financial responsibilities for your parents, especially if they are aged. Hence, in the event of your unfortunate demise, the death benefit will secure them financially. And, if you outlive the policy, you will receive all your premiums paid during the policy term.
Married Couples: If you’re married and your partner solely depends on your income source, term insurance with return of premium (TROP) may be the ideal solution for you. TROP plan provides financial support for your spouse against life’s uncertainties.
Parents: If you are married and have children, it is your main responsibility to protect your children's future. TROP ensures that your loved ones and kids are financially protected in case of any eventualities in the future, thereby ensuring that your children’s education and career are not hampered.
There are several benefits of term insurance that an individual should take into consideration, and a term insurance with return of premium plan has all those benefits with an additional one, i.e. return of all premiums upon maturity of plan. Let’s understand some of these benefits of term plan return premium below:
Return of Premium (ROP) Benefit
Term Return of Premium (TROP) plan refunds all the premiums paid if the policyholder survives the entire policy term. This feature provides financial security by offering a return on investment, unlike traditional term policies where premiums are not refunded.
Protect Family Against Risks
TROP plans offer life insurance coverage to ensure the policyholder's family is financially protected in the event of their death during the policy term. The sum assured helps beneficiaries manage expenses and secure their future against unforeseen risks.
Death Benefit to Nominees
TROP plans provide lump sum payout to the designated beneficiaries of the policyholder upon their untimely death, also called the death benefit. This is the life cover amount chosen by the policyholder and this amount ensures that loved ones receive financial support and coverage as intended by the policy.
Additional Rider Benefit
A number of insurance companies offer options for TROP riders that allow the policyholder to get extra term insurance benefits over and above the base term plan with an increase in premiums. The rider's options offered by insurance providers:
Critical Illness Rider: This rider covers various critical illnesses, such as cancer, stroke, heart attack, and CABG. The coverage for these illnesses varies from company to company.
Premium waiver Rider: This allows the option to waive off premium under specific T&Cs.
Accidental Death Benefit Rider: This rider option covers the policyholder if he/she dies because of an accidental death
Save Tax Every Year With Tax Benefits
Buying term insurance with return of premium makes an individual eligible for the tax savings benefit. You can get term insurance tax benefits as per the prevailing laws of the Income Tax Act, of 1961. The premium amount paid towards the term insurance plan and the benefit payout is free of taxes under sections 80C and 10(10D).
Here is a list of some reasons why buying a term return of premium plan is important:
No loss of money
A standard term insurance plan with life cover offers you a death benefit but not the maturity benefit but TROP ensures that you get back all the premium amount paid by you.
Guaranteed Return
The return amount from this TROP plan is guaranteed both the life cover and the return of the premium.
Flexible-Premium Payment Options
In TROP, policyholders can choose payment options such as annual, half-yearly, quarterly, monthly or on a single go based on their convenience.
Revival Scope
If you miss paying the premiums, TROP policies can be revived within 5 years from the last payment date. If the premiums remain unpaid after this grace period, the policy automatically converts into a paid-up policy to prevent it from lapsing.
A term plan with return of premium provides the best way for individuals looking for protection and an investment return. Unlike standard term plans, TROP provides a lump sum amount of all premiums paid (minus GST and other taxes) in case you survive the policy term. This option helps individuals who want peace of mind along with the money-back option.
With the availability of a comprehensive range of insurance products, selecting the right one can be challenging for a policy buyer. Choosing plans based on factors like cost or policy duration might not be optimal. It's crucial to weigh the comprehensive benefits of term plan with return of premium to ensure satisfaction with the decision.
There are three variants of term insurance that provide a return of premiums. Term insurance with return of premium plan, No Cost term insurance, and special exit benefits in regular term insurance. You can assess your needs and requirements to see the optimal plan for yourself and your family.
How does a Term Insurance with Return of Premium (TROP) plan differ from a regular term insurance plan?
The main difference between a Term plan with Return of Premium (TROP) plan and a regular term insurance plan is that TROP offers a return of all premiums paid at the end of the policy term if the policyholder survives. Whereas, regular term insurance does not provide any return of premiums and only pays out the sum assured upon the policyholder's death during the policy term.
Are there any tax benefits associated with Term Insurance with Return of Premium (TROP) plans?
Yes, TROP plans offer tax benefits under Section 80C of the Income Tax Act, where premiums paid up to ₹1.5 lakh per annum can be deducted from taxable income. Additionally, the maturity benefit received at the end of the policy term is tax-free under Section 10(10D), subject to certain conditions.
What are the key factors to consider when choosing a Term Insurance with Return of Premium (TROP) plan?
When choosing a Term Plan with Return of Premium (TROP) plan, consider factors such as the premium amount, the policy term, the sum assured, the insurer’s claim settlement ratio, and any additional benefits or riders offered. It's important to assess your financial goals and compare different plans to find one that best suits your needs and budget.
A Term Return Of Premium Calculator is an online tool that helps you determine the maturity amount that you can receive based on the various options that you select. The Term Return Of Premium Calculator is simple to use and you just need to enter a few necessary details to use it, such as:
Gender
Tobacco Consumption
Age
Required Life Cover
Age Until Which You’re Covered
Below are some of the reasons why you should opt for a term plan with return of premium:
| Term Insurance Riders | Details |
| Death Benefits | In case of an unforeseen death, the deceased family will receive the sum assured or life cover from a TROP. This amount will financially protect your family during difficult times. The ideal cover should be 10 to 20 times the policyholder's annual income. |
| Survival Benefits | Along with the death benefits, the TROP plan ensures that the policyholder does not lose the premium paid. Generally, 105% of the total paid premiums are returned during maturity in case of the policyholder’s survival. |
| Tax Benefits | The tax is exempt from the premium payment u/s 80C of the Income Tax Act and can be deducted up to Rs. 1.5 lacs per annum. The death benefits and maturity benefits are also exempted u/s 10(10D). |
| Rider Benefits | With the return of premium, you can add riders to your term plan and get coverage for emergencies such as accidents or critical illness. |
| Critical Illness Rider | Covers certain illnesses such as heart attacks, stroke, cancer, certain cardiovascular surgeries, etc. The number of illnesses covered by different companies varies, and people should take note of the ones the rider covers before they opt for it |
| Waiver of Premium Rider | Waives future premium payments under specific conditions in life insurance |
| Accidental Death Benefit Rider | This rider is an optional addition to the base life insurance plan that policyholders can choose for increased coverage at affordable premiums |
| Accidental Total and Permanent Disability Rider | Provides financial protection for policyholders in case of a permanent disability caused by an accident during the policy term |
A term plan with return of premium, also known as TROP, is different from a term plan as it provides a survival benefit as a premium return in addition to the death benefit.
Here is a list of all the features of the Term plan return of premium:
| Features of Term Insurance with Return of Premium (TROP) Plans | Details |
| Affordability | In Term Plan with Return of Premium, the premium amounts paid are returned as maturity benefits and exempted from taxation. You can easily get your premium amounts paid back at no additional cost. |
| Premium Payment Options | You can select the suitable sum assured amount under term plan with return of premium. Moreover, you can also choose the right premium payment option from:
|
| Guaranteed Premium Return | With a term plan with return of premium, the policyholders don’t have to panic about the return of their paid amount, as it is assured under the plan. This plan offers guaranteed returns on the total premium paid, excluding the extra premium amount paid for the riders and add-ons (if any). |
| Maturity Benefits as Refund Amount | In Term Insurance with Return of Premium, the refund of the premium amount is offered at maturity, if the life assured survives the policy term. This, in turn, the life assured does not lose the premium amount paid over the years. |
| Surrender Value | If you want to discontinue the payments of premium or surrender the term plan after buying the term plan with return of premium (TROP), you will get a surrender amount. The surrender value of the TROP generally varies depending on the payment option.
|
| Paid-Up Option for Non-Earning Individual | This is a benefit for individuals who are not earning and have no fixed income and are provided under a term plan with return of premium. Under this, as mentioned earlier, the plan continues if the policyholder is unable to pay the premium, though with a lower cover. Most companies require the policyholder to pay the premium for a minimum number of years before they offer this benefit. |
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Term Insurance Plans generally come in 2 variants: Pure term insurance plan and Term Plan with Return of Premium i.e., TROP. Both these types of term insurance plans serve different needs and goals of individuals. In some cases, people think that they will receive returns by investing in any financial products. However, that is not the case for all term plans. Let’s discuss the difference between term insurance vs return of premium in detail:
| Pure Term Insurance Plan | Term Plan with Return of Premium (TROP) |
| Known as a pure protection plan, it is the simplest and most affordable form of life insurance | Term insurance with return of premium is a variant of term insurance plan |
| In a pure term insurance plan, the insurance coverage is offered only as a death benefit. | Term plan with return of premium offers insurance coverage as a death benefit along with the benefit of the return of premium in case the policyholder survives the entire policy term. |
| The premium rate of a traditional term insurance plan is very affordable. | The premiums charged by term insurance with return of premium are slightly higher. |
| Offers the benefit of tax exemption under section 80C of the Income Tax Act. | Term plan with return of premium also offers the benefit of tax exemption under section 80C of the Income Tax Act. |
| A term plan is best suited for an individual who wants to provide financial protection to their family. | Term insurance with return of premium is best suited for individuals who want to receive the premiums paid along with the benefit of insurance coverage. |
In order to find the best term insurance plan with return of premium, it is always important to check a few points. Following are some points that you should consider before choosing a term plan with return of premium:
Before buying TROP, always assess the coverage amount as per your requirements in case of your unforeseen death
Ensure that the premium you have to pay fits your budget so that you don’t skip any premium payments or compromise on other expenses.
Check if your insurance company's claim settlement ratio is high. High CSR indicates the fast settlement of claims.
Check for an insurance company that has a good solvency ratio.
Your TROP plan should provide yearly, half-yearly, quarterly, or monthly premium payment options.
Step 1: Visit the Term Insurance with Return of premium page
Step 2: Fill in the basic details like name, age, and contact number, and then click on ‘View Plans’.
Step 3: Answer the questions about chewing or smoking habits, annual income, type of occupation, and language.
Step 4: After submitting all the details, a list of all available term insurance plans will be displayed.
Step 5: Click on the filter for the term plan with return of premium plans
Step 6: Choose the best term insurance with return of premium and proceed to pay
Overview
Term insurance is one of the most preferred plans due to its affordability. However, the fact that regular term insurance plans do not provide maturity benefits may discourage customers from purchasing them. The term insurance with return of premium benefit allows customers to receive the entire premium paid at the end of the policy as a maturity benefit. Therefore, unlike regular term plans, TROP plans provide both death and maturity benefits within the same plan.
Tax Benefits
Term insurance with return of premium plans offers tax benefits as per the prevailing tax laws under sections 80C and 10(10D) of the Income Tax Act, 1961. This means you can avail tax benefits on the premiums paid and the benefits received.
Premium Rates
The premium rates for term insurance with return of premium plans are slightly higher than regular term plans. However, they return the entire premiums paid towards keeping the policy active at the end of the policy term on survival. Thus, in case of untimely death, your nominee will be financially secured, and in case you outlive the policy term, you will receive the premiums paid, which can help you take care of your post-retirement life.
Factors to Consider
While looking for the best term insurance with return of premium option, keep the following factors in mind:
Life cover should be enough to cover your family’s financial needs in your absence
The premium rates should be affordable enough to fit your budget
Buy term insurance with return of premium from an insurer with good CSR (over 95%)
Select the most suitable premium payment option (single, monthly, quarterly, bi-annually, or yearly)
ROP under MWP Act
The term insurance with return of premium plans are available under MWP (Marriage Women’s Property) Act. This ensures that only the wife or kids of the policyholder will be eligible to receive the death benefit in case of an eventuality. Not only that, on survival of the policy, the return of premiums can only be claimed by the wife and children.
Ans. You can buy the best term insurance with return of premium online by following the below steps:
Ans. The best term insurance with return of premium will offer a variety of death benefit options like:
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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