Term Insurance with 100% Refund of Premium at NO COST

What is Term Insurance with 100% Refund of Premium at NO COST?

The term insurance with 100% refund of the premium allows you to exit the plan early and receive all the premiums paid back on the termination of the policy. With this plan, on the death of the policyholder, the sum assured on death is paid as a death benefit to the nominee of the policy. The plan allows you to exit the plan at a specific stage before the end of the policy term. On opting to exit the plan early, you will receive all the premiums paid till that point back and the policy will terminate. Apart from this, the special exit benefit and the term insurance with return of premium allow you to receive all the premiums paid back as well.

Many individuals prefer buying the above three types of plans as these return all the premiums paid. This is because the regular term insurance plans do not pay any benefit on outliving the policy term. You can check the different types of term insurance plans to compare and buy the term insurance plans for your needs.

"This plan comes at the same premium as the regular term plan. It has a special exit feature where you can exit at a specific life stage and get all your premiums back whenever you want, during the time period provided by the insurer. So, you get the flexibility of getting a refund of your paid premium amount at the same cost which otherwise might have cost you twice."

How 100% Refund of Premium at No Cost Term Insurance Works?

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

In this scenario:

• A 30-year-old non-smoker purchases a term insurance plan with a life cover of ₹1 crore until age 75.

• He pays a monthly premium of ₹926, which totals ₹3,77,434 over the years until he reaches 60.

• If he decides to exit the plan early at the age of 60, he gets back the total premium paid, which is ₹3,77,434.

Note: It is important to note that the premiums refunded on terminating the policies purchased before 22 September 2025, will not include the GST in the refunded premium.

What are the Features of a 100% Refund of Premium at No Cost Term Insurance Plan?

A 100% Refund of Premium at No Cost Term Insurance plan has the following features:

• Refund of Premium at Exit: When you cancel the policy, you get back all the premiums you paid during the term, minus any taxes that may apply. This special exit value feature makes sure you don't lose the money you've put into the policy.

• High Life Cover: Under a zero-cost term insurance, your family is secured with a sufficiently high life cover, such as ₹1 crores or more, to keep their lifestyle going and also meet all major expenses arising due to any eventuality to you.

• Death Benefit: In case of the policyholder's death during the policy term, the insurance company provides a lump sum amount to the nominee. This payout offers financial stability and security to your loved ones during difficult times.

• Flexible Term Options: You can choose the amount and length of coverage that works best for you and your future goals. It can be set up to cover you for 10, 20, or more years, depending on your needs.

• Available Riders: You can add optional riders, such as critical illness or accidental death benefits, to your plan to make it comprehensive. These riders give you more protection and help cover more risks so that you have enhanced coverage.

What are the Benefits of Buying a No Cost Term Insurance?

• Cost-Effective: This type of life insurance offers you a large life cover at an affordable cost. You can secure your family's future without straining your current budget.

• Flexibility: You can customize the free of cost term insurance based on your financial needs, by changing the cover amount, policy term, or premium payment frequency, the policy can be adjusted to your lifestyle.

• Ideal for Salaried Individuals: For the families of salaried policyholders, the plan acts as an income replacement in your absence. It pays the benefit amount to your family in case of your unforeseen death and helps them take care of their financial needs.

• Tax Savings: With the free of cost term insurance plans you can also claim term insurance tax benefits. Premiums paid under this policy qualify for tax deductions under Section 80C, and the death benefit your family receives is tax-exempt under Section 10(10D).

• Peace of Mind: This policy gives you peace of mind that your loved ones will be financially safe even if something happens to you. Also, you can leave the plan early and get your premiums back, which is nice.

What are the Limitations of a 100% Refund of Premium at No Cost Term Insurance?

• Limited Coverage: The special exit value feature might lower the coverage amount compared to traditional term plans.

• No Maturity Benefit: The special exit value feature might lower the coverage amount compared to traditional term plans.

• Strict Exit Conditions: Special exit value feature may have specific conditions or penalties, and the refund is limited to premiums paid, excluding taxes.

• No Investment Component: This zero-cost term insurance does not include an investment feature, unlike plans like ULIPs, which offer returns on investments.

• Inflation Impact: The refunded amount may not account for inflation, reducing the value of the refund over time.

Difference Between 100% Refund of Premium at NO COST and Term Return of Premium Plan

You can get back all of the premiums you paid until the end of the policy with both ROP and no-cost term plans. To help you understand the two plans better, let us discuss the difference between these two term plan variants:

Should You Buy a No Cost Term Insurance Plan or Term Return of Premium Plan?

Financial advisors always suggest opting for the plain-vanilla term plan. You can buy a term insurance plan with life cover online having low-cost till 70 years of age to meet your insurance needs. Let’s say, at 55 years you have met all your financial responsibilities or have accumulated sufficient funds to meet them, then you can think of discontinuing the term insurance plan by opting for 100% refund of premium at no-cost term insurance plan.

What are the Reasons to Buy 100% Refund of Premium Term Insurance Plans?

Here are a few reasons you should buy the 100% refund of premium at no cost term plan:

• These plans are more affordable for customers in comparison to Return of Premium (ROP) plans. Generally, no-cost term plans are about 50% cheaper than ROP plans.

• These free of cost term plans are suited for customers who are not sure of their retirement age or dependency of family members on their income at an older age.

100% Refund of Premium at No Cost Plans Available at Policybazaar

Before selecting the no cost term insurance plan, you need to understand what is term insurance. Let’s discuss the details:

˜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

What are some Things to Consider Before Buying a No Cost Term Insurance Plan?

There are the following factors to be kept in mind before purchasing no cost term insurance:

• Understanding the Policy:
  Always read and understand all the terms, conditions, cover details, how does the special exit value works, and what if the zero cost term insurance matures before exit.

• Coverage Amount:
  Assess how much coverage your family would need if something happens to you. You should select a sum assured that secures their financial well-being in your absence.

• Premium Payment:
  Make sure that you pay the premiums in a suitable premium payment mode and term. Also, check for any hidden fees or charges that might be part of the plan.

• Policy Term:
  Ensure the policy term matches your future financial obligations and provides protection for the time you need it most.

• Riders:
  Check out the riders that are available, such as critical illness or accidental death benefits, to get more coverage that fits your needs.

• Life Insurance Company:
  Choose a reputable insurer with a good claims settlement history and strong financial stability for peace of mind.

Documents Required to Buy a 100% Refund of Premium at No Cost Term Plan

The list of documents required to buy a zero cost term insurance or 100% refund of premium term plan are as follows:

• Identity Proof (Aadhaar Card, Voter ID, PAN Card, etc.)

• Address Proof (Driver’s License, Aadhaar, Driving License, etc.)

• Income Proof (Salary Slips, bank statements, or copy of filed Income Tax Return)

• Medical reports (if asked by the insurer)

• Age Proof

• Recent passport-sized coloured photograph(s)

How to Buy a No Cost Term Insurance Plan from Policybazaar?

Here is how you can buy a no cost or zero cost term insurance plan from Policybazaar:

Step 1: Visit the term insurance page of Policybazaar

Step 2: Fill in the required details like name, gender, and contact number

Step 3: Select the right occupation type, smoking habit, educational qualifications, and annual income

Step 4: Choose the zero cost term insurance policy and proceed to pay

Note: You should also check the benefits of term life insurance if you are planning to purchase the term insurance plan.

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