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Do You Get Money Back In Term Life Insurance?

Yes, you can get money back in term life insurance, i.e. the entire premium paid when your policy matures. However, a certain variant of term insurance gives back money, unlike the regular term plan, which only provides death benefits. Let’s understand all about money-back term life insurance, its key features and how it differs from a regular term insurance plan.

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What Is Money Back Term Life Insurance?

Money back term life insurance is a term plan in which the policyholder’s premiums are returned in the form of survival benefit if he/she outlives the policy term. However, in the unfortunate event of the policyholder's death, the nominee receives the chosen life cover as a death benefit. 

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

Ramesh is a 30-year-old, non-smoking male earning an annual salary of Rs. 12 Lakhs per annum who bought a money-back term life insurance from Policybazaar. He chose Rs. 1 Crore life cover for a 30-year policy term and will now be paying Rs. 14,680 per year for the entire policy term. In the event of Ramesh’s untimely death, his nominees will receive the death benefit (Rs. 1 Crore). But, if Ramesh survives the policy term (30 years), he will be returned all his premiums paid as survival benefit, i.e. Rs. 14,680 x 30 = Rs. 4,40,400.

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Can You Get Money Back In Term Insurance?

Yes, you can get back money in the form of a maturity benefit in term insurance plans. These plans are just like regular term plans with the dual benefits of death and survival benefits. Let’s understand the type of term insurance plans that give back money.

  1. TYPE 1: Money back term life insurance, i.e. Term Insurance with Return of Premium Plans

    Term Insurance with Return of Premium Plan (TROP) provides death benefits to the life assured’s family members in the unfortunate event of his/her death, along with maturity benefit if the policyholder outlives the policy term. Here are the features of Term Insurance with Return of Premium plans:

    • Affordable Premium Rates: Premiums returned as maturity benefits, tax-exempt.

    • Payment Options:

      • One-time payment: Lump sum premium

      • Regular Pay: Fixed intervals (yearly, half-yearly, quarterly, monthly)

      • Pay till 60: Premiums paid till age 60, policy till 85

      • Limited Pay: Fixed installments for TROP

    • Guaranteed Premium Return: Assured returns on total premium, excluding riders/add-ons.

    • Maturity Benefits: Premium refund if life assured survives the policy term.

    • Surrender Value: Available after specific payment intervals.

      • Single premium type: Valid after single payment

      • Limited/Regular pay type: Applicable after 2 years

    • Paid-Up Option: Continuation with lower cover for non-earning individuals.

    • Additional Riders:

      • Critical Illness

      • Waiver of Premium (WOP)

      • Accidental Death Benefit

      • Accidental Total and Permanent Disability

  2. TYPE 2: Regular Term Insurance Plan that does not give back money

    Term Insurance is the most simple and affordable form of life insurance that provides death benefit to the policyholder’s nominees after his/her unfortunate death. It is a pure-term insurance plan and is best suited for individuals who want to provide financial security to their loved ones. Here are the features of regular Term Insurance plans:

    • Financial Protection for the Family:
      Term life insurance secures your family's future, ensuring financial support in your absence as the primary provider.

    • Long Term Coverage:
      You can choose long-term coverage up to 99/100 years to financially secure your loved ones for longer duration.

    • High life cover at low premium rates:
      Affordable term life insurance provides comprehensive coverage at affordable premiums, to tackle financial burden and liabilities effectively.

    • Protection against Critical Illnesses:
      Term plans with critical illness coverage offer peace of mind, ensuring access to quality treatment for life-threatening diseases without the burden of hospital bills.

    • Coverage against Disability:
      Safeguard against accidents with disability coverage in term policies, providing financial support to your family in case of permanent or temporary disability.

    • Multiple Premium Payment Options:
      Choose the premium payment term that suits you best with term insurance plans, offering flexibility in payment options, including regular payments or a limited pay option.

    • Tax Benefits:
      Tax savings up to Rs. 1.5 Lakhs on premium payments under section 80C, while the death benefit is tax-exempt under section 10(10D) of the Income Tax Act, 1961.

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Can You Get Your Money Back Within the Free-Look Period?

Another way to get your money back from your term insurance plan is canceling it within its free-look period.

The policy document comes with information about the free-look period when you purchase any type of insurance policy. During this tenure, you can cancel your insurance policy without any charges and get your money back on your premiums. 

You have a minimum of 15 days (or 30 days for electronic policies and policies issued through distance mode) to review the terms and conditions of the policy and return it if you are not satisfied. You can find the details of your policy’s free-look provision in your policy wordings.

You can cancel your policy at any time during the free look period. You will need to contact the insurer to cancel your insurance. 

Do Term Life Insurance Plans Have Cash Value?

A pure term insurance plan does not have cash value and only offers maturity benefits to the nominee in the unfortunate event of the policyholder's demise during the policy term.

However, a money back term life insurance plan (i.e. Term insurance with return of premium plan) generates cash value. Therefore, if the policy is terminated before it expires, the policyholder receives the total of all premiums paid until that point (minus any early termination charges) as benefits.

How To Buy Money Back Term Life Insurance Online?

You can easily buy a Money Back Term Life Insurance, i.e. a TROP Plan, online by following the below mentioned steps:

  • Step 1: Visit the official website of Policyabzaar and go to Term Insurance with Return of premium 

  • Step 2: Fill in the required details, such as name, DOB, contact number and gender, and then click on ‘View Plans’.

  • Step 3: Answer the questions regarding your smoking habits, yearly income, type of occupation, and language.

  • Step 4: After submitting all the necessary details, a list of all available term insurance with plans will be displayed.

  • Step 5: Filter out the return of premium plans by clicking on the option mentioned above.

  • Step 6: Select the term plan that best suits you and proceed to pay using your preferred payment method.

Wrapping It Up!

Whether or not you will get money back after term life insurance depends on your chosen term plan. You must assess all your life goals, health conditions and loans/debts to buy the ideal term insurance plan. You can easily use Policybazaar’s comparison engine to compare from among 15+ top insurers of India and buy the plan that best suits your needs and situation.


  • Q: If I outlive my term insurance plan, will I get any money back?

    Ans: If you have purchased a basic term insurance plan, you will not get any money back. However, you will get your money back with TROP when you outlive your policy term.
  • Q: How much can I earn from a term insurance plan?

    Ans: The maximum you can earn from a TROP plan is the cumulative sum of all the premiums you have paid until the policy maturity.
  • Q: Can I get the policy money back within the free look period?

    Ans: Yes, if you cancel the insurance policy within 15 days or less.
  • Q: Can I convert my active term insurance plan to a TROP plan to get my premiums back?

    Ans: No, you cannot convert your active term insurance plan to a TROP plan to get your premiums back

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