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6 Benefits of Investing in Term Insurance with Return of Premium

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Life is really unpredictable, according to a report published in The Hindu Business Line, 53 accidents occur on Indian roads (every hour), killing 1 person every 4 minutes. With such a high mortality rate, you should be covered by insurance policies . However, the bulk of the population lacks sufficient insurance coverage. Term insurance policies can make life insurance affordable to many individuals.

Term insurance is a popular insurance option among policyholders. It is frequently described as a pure instrument for securing one's financial future. While it may be sufficient for most people, options like term insurance with a return of premium might provide additional benefits.

What is a Term Plan with Return of Premium?

A term plan with return of premium (TROP) is a form of term insurance that, like a regular term insurance plan, responds to the needs of the covered individuals. It provides financial security to the insured individual's family in case of a disaster. A term insurance with a return of premium plan, like any other term insurance plan, provides death benefits but additionally, also provides a guaranteed return of premium as a maturity benefit if the policyholder survives the term of the policy.

By paying an extra premium, policyholders might benefit from a term plan with a premium return. You have the option of selecting the needed sum assured and insurance duration, as well as paying premiums appropriately. When the policy expires, the insurance company will reimburse the customer for the premiums paid.

The Advantages of Purchasing TROP

Term insurance with a return of premium includes all of the advantages of ordinary term insurance plus a survivor bonus. It's an excellent choice for those looking for a guaranteed return on their life insurance policy. The following are some of the advantages of purchasing a TROP :

Assured Returns

The policyholders of a TROP do not have to be concerned about the return of their money. It is because it comes under the policy plan. This coverage plan offers assured returns on the whole amount of premium paid, less any additional premiums paid for add-ons or riders if any.

Survival Benefits

Term insurance policies typically do not provide maturity benefits, but the term insurance with return of premium plans provide a survival benefit in the form of a refund of the premiums paid. Let's say you're looking for a cover of Rs. 2 crores and come across a TROP plan with a premium of Rs. 9,100 each year. The plan is for ten years, and the premiums are paid regularly. It indicates that you will spend ₹91,000 on life insurance coverage over ten years. When the 10-year period has passed, and you have outlived the policy, the insurer will give you an amount of ₹91,000 as a survival bonus.

Rider Benefits

The best term life insurance with a return of premium provides the possibility of rider benefits to supplement insurance coverage. Insurance companies provide a variety of extra riders from which a customer might select. It is preferable to purchase riders such as personal accident, physical handicap, severe sickness, and so on at the time of purchase. They offer full coverage from the moment you sign a term insurance policy. Riders are not mandatory and available at an additional cost.

Tax Benefits

Buying the best term life insurance with a return of premium qualifies a person for tax advantages. You can take advantage of the benefits according to the current tax rules. The premium paid for the term plan and the benefit amount is tax-free under Sections 80C and 10 (10D) respectively (subject conditions mentioned therein). On premiums paid for a term plan with return of premium, you can claim a tax deduction of up to Rs. 1.5 lakhs. However, these laws are subject to change.

Death Benefit

In the event of the insured person's death due to any reason, the term a plan with return of premium pays the nominee a death benefit equal to the whole sum assured amount. Depending on the plan, manner of premium payment or kind of cover chosen, different insurance firms provide different sum assured.

Paid-up Value

It's a feature that is available in the best term life insurance with return of premium. As previously stated, if the policyholder cannot pay the premium, the plan will continue, albeit with a reduced level of coverage. Before offering this benefit, most firms demand the policyholder pay the premium for a certain number of years.


*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.