Term Insurance with Return of Premium

This is specifically designed for those who want life cover but don’t want to lose their premium if nothing happens to them during the policy term. In exchange for this refund benefit, TROP plans generally charge a noticeably higher premium than the regular term plan.

What Is A Term Insurance With Return Of Premium (TROP) Plan?

Term insurance with return of premium is a life insurance plan that pays the full life cover to your nominee if you die during the policy term, and refunds all the premiums you have paid in case you outlive the policy term. It is a variant of a pure term insurance plan. By paying an additional premium, policyholders can take advantage of TROPs. You can choose the required life cover and policy term and then proceed to pay the premiums. This plan is suitable for:

• Those who are looking to get their money back after surviving the policy term

• Those who need life insurance to financially protect their families in case of their death.

Best Term Insurance with Return of Premium Plans 2026

Below mentioned are the best term plan with return of premium:

˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.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 IRDAI website www.irdai.gov.in

You can use a term insurance 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.

How Does Term Plan with Return of Premium Work?

A standard term insurance plan allows you to pay premium regularly, and if you pass away during the policy term, your family gets the death benefit (sum assured). But if you survive the full policy term, you get nothing back in return.

Term insurance with Return of Premium works in a different way. It has two possible scenarios:

• If you pass away during the policy term: Your nominee gets the full life cover, just like a regular term insurance plan.

• If you survive the policy term: You get back all the premium amounts you paid (excluding taxes, rider charges and extra premiums charged due to health, occupation, or lifestyle factors) as a maturity benefit.

The refund is paid along with other benefits, such as interest and bonuses, as per the policy tenure. Once the amount has been processed, the TROP plan terminates and the benefits of this policy cease.

To calculate the premium amount, you can use a term insurance premium calculator which helps compare different plans based on duration, coverage, and premium cost.

Let’s understand this with the help of an example:

Mr. Sharma is a 25 year old male earning 9 LPA, planning to buy a term plan for himself. He is healthy, no smoking history, no health problems. He buys a TROP plan with a life cover of ₹1 crore. For a policy term of 35 years, the annual premium payable is ₹14,095.

Scenario 1: Death of Mr. Sharma in the policy term

In case of Mr. Sharma’s death in the policy term, his nominee will receive a death benefit of ₹1 crore, and the policy will terminate

Scenario 2: Survival of Mr. Sharma till the end of the policy term

If Mr. Sharma survives till the end of the period of the policy, he will receive the eligible premiums payable as a maturity benefit, as specified in the policy terms. GST, rider premiums and other charges are generally excluded from this refund.

What Are The Benefits Of Term Insurance with Return Of Premium?

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 the plan. Let’s understand some of these benefits of the best term plan with return premium below:

• Full Refund of Premium Benefit

Term Return of Premium (TROP) plans offer the added advantage of refunding all premiums paid if the policyholder survives the policy term. With various TROP plans, customers can receive their premiums back (minus nominal charges), which helps them ensure the financial protection of their loved ones, along with the benefit of receiving their premiums back on survival.

• Protect Your Family Against Life's Uncertainties

Return of Premium term life insurance protects your family financially if something happens to you during the policy term, giving them the sum assured to cover expenses and secure their future. If you survive the term, you get back every premium you paid — so your family stays protected either way.

• Helps Build Savings

The refund amount that is received from a TROP can serve as a savings or can be used as a policyholder’s retirement corpus. The lump sum payout may also be re-invested to take care of your family’s financial needs.

• 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 makes sure that loved ones receive financial support and coverage as intended by the policy.

• Increased protection through Riders

TROP plans allow the addition of term insurance riders such as critical illness cover, accidental death benefit, and waiver of premium. These riders enhance the return of premium term life insurance by providing customized and comprehensive protection against various uncertainties.

• Choose Return Option

Term insurance with return of premium plans allows customers to choose the most suitable refund option, like receiving the maturity benefits in a lump sum, as monthly installments, or as a combination of both.

• Assurance of No Wasted Premiums

Many customers wonder if, with regular term plans, if they outlive the policy, the premiums they paid would be wasted, as no benefit is payable on survival. In TROP plans, the plan provides cover during the policy term and upon outliving the policy, the premiums paid throughout the policy are returned at the end of the policy term.

• Flexible Premium Payments

You can choose the most suitable premium payment mode and term in a term insurance with return of premium by selecting the monthly, quarterly, half-yearly, and yearly modes. You can also choose to pay the premiums in regular, limited, or single premiums.

• Save Tax Every Year With Tax Benefits

Buying the best term insurance with return of premium makes an individual eligible for the tax 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 can be claimed as a deduction under Section 80C, and the benefit payout is free of taxes under Section 10(10D), provided your annual premium does not exceed ₹5 lakh for policies issued on or after April 1, 2023.

Note: Section 80C deductions are not valid under the New Tax Regime.

What are the GST Updated Benefits for Term Return of Premium (TROP) Plans?

Earlier, when GST on Term Insurance was allowed to be deducted, the refund amount received under a TROP policy was less than the total amount of premium paid. The reason was that the GST part of the premium was paid to the government and not refunded to the policyholder.

Let’s say

If you have paid ₹2 lakh as a premium over the policy tenure, that includes GST, you would only get back the base premium (after GST deduction) at the end of the policy term.

But now with the introduction of the recent GST Council Announcement, policyholders are now entitled to receive the entire premium amount paid when they surrender the TROP policy. This makes TROP plans more efficient. Simply put, you will enjoy both sum assured amount and a full refund of your payment (minus some charges, and tax), making those plan more convenient than before.

Why Should You Get Term Insurance with Return of Premium (TROP)?

A term plan with return of premium provides the best way for individuals looking for protection and an investment return. Unlike standard term plans, return of premium term life insurance provides a lump sum amount of all premiums paid (minus other nominal charges) 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 a 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, understand term insurance and find the best plan for yourself and your family.

What are the Features of Term Plan with Return of Premium?

A return of premium term life insurance, 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:

Who Can Buy Term Insurance With Return Of Premium (TROP)?

When it comes to fulfilling financial commitments like buying the best 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 the best term insurance with return of premium.

• 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, how term insurance works is that it will provide a death benefit to secure them financially. And, if you outlive the policy, you will receive all your premiums paid during the policy term.

• Married: 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. How term insurance works is that it provides financial support for your spouse against life’s uncertainties.

• Married with Kids: 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 with term insurance, your children’s education and career are not hampered.

• Senior Citizens and Retirees

A term plan with a money back feature is advantageous for senior citizens or those individuals who are planning for retirement.

NRIs

NRIs can buy TROP to support their loved ones in India. In addition to this, as per Double Taxation Avoidance Agreement (DTAA) of India, NRIs can claim a tax deduction in case of term plan maturity, with certain T&Cs.

Before buying a right return of premium plan you can use a Term Return of Premium Calculator to estimate your premiums and understand how the plan fits your financial goals.

What Is Term Return Of Premium Calculator?

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

What are the Available Term Plan with Return of Premium Riders?

Below are some of the best term plan with return of premium riders available in India:

Why Should You Buy from Policybazaar?

Here is why you should buy the best term insurance with return of premium from Policybazaar:

• Dedicated claim support for family FREE

• Discounts up to 15% for buying online

• 100% calls recorded to ensure no mis-selling

• Advisors available in your city

• Refund at the click of a button

What is the Difference Between Term Insurance and Term Insurance with Return of Premium?

How to Choose the Right Term Insurance Plan with Return of Premium Option?

In order to find the right 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.

How to Buy Term Insurance With a Return of Premium Plan from Policybazaar?

Step 1: Visit the Term Insurance with Return of Premium Form

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: Filter out the return of premium plans

Step 6: Choose the best term plan with return of premium that suits you and proceed to pay

Common User-generated Questions

Return of Premium V/s Zero Cost Term Plan: Which is better?

• Both Return of Premium (ROP) and Zero Cost Term Plans serve individuals with different needs. In a term insurance with return of premium plan, you get all your premiums back at the end of the policy if you survive the term. In a Zero Cost Term Plan, you can exit the policy after a few years and get your premiums back, but coverage also ends there. If you're looking for guaranteed return of premiums, term plan with return of premium is better. If you want flexibility to exit early, a Zero Cost Term Plan may suit you more.

What is Refund of Long Term Insurance Premium?

• Refund of Long-Term Insurance Premium is another name for a term plan with return of premium, and means you get back the total premiums you paid over the years if you outlive the policy term. This is available in plans like Return of Premium term life insurance, where survival benefits are offered along with life cover.

Is there a company that offers return of premium term life insurance?

• Yes, many life insurance companies in India offer Return of Premium term life insurance. You can check and compare the best term insurance with return of premium plans across various insurers to find the one that suits your needs the best. These plans give you the dual benefit of life cover and a refund of premiums at the maturity of the policy.

Key Takeaways

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 comes with tax benefits under the Income-tax Act, 1961. Premiums paid towards these plans are eligible for a deduction under Section 80C, up to ₹1.5 lakh per year. The payout you receive, whether it is the death benefit or the return of premium on survival, is usually tax-free under Section 10(10D).

However, this tax-free benefit is not available for policies issued on or after April 1, 2023, if your annual premium exceeds ₹ 5 lakh.

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 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 Claim Settlement Ratio (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 (Married 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.

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