Term Insurance with Return of Premium

A term insurance with return of premium (TROP) plan is a type of life insurance plan which offers protection against the death of the life insured. Unlike regular term plans, a TROP policy offers the dual benefit of life cover and premium refund at the end of the policy term. This makes this type of term plan an appealing choice for those who prefer a balance between protection and savings.

Such schemes are especially advantageous to those who are financially risk-averse and want to obtain their money back in case no claim is made on the term plan. Apart from life cover, other benefits of TROP include waiver of premium, accidental death cover benefit, critical illness protection and tax benefits.

Under a term insurance policy with the return of premium, the policyholder pays a fixed amount of premium over a specified number of years, typically ranging from 5 to 30 years. In the event of the policyholder's demise during the policy period, the nominee or nominees are entitled to receive the sum assured.

However, unlike a pure term plan where there are no maturity or surrender benefits, a TROP policy can be surrendered to receive a refund for all premiums paid earlier. Additionally, in most cases, the refund is paid along with benefits such as bonuses and/or interest as per the policy terms. Once the refund has been processed, the TROP policy terminates and the plan benefits cease.

To estimate the premium amount and potential benefits, you can use a term insurance premium calculator, which helps compare different plans based on coverage, duration, and cost. Let’s understand this with an example.

Suppose Aryan, a 28-year-old professional, wants to secure his family’s financial future while also ensuring that his money is not lost if he decides to surrender the policy term at a later date. Now suppose he decides to purchase a term insurance with return of premium plan with the following details:

• Annual Premium: ₹18,000
• Sum Assured: ₹1 crore
• Policy Term: 30 years
• Premium Payment Term: Regular i.e. 30 years

Aryan will pay ₹18,000 every year for 30 years to keep this policy in effect. There are two possible outcomes:

Scenario 1: Aryan Passes Away During the Policy Term

In case of his demise before the end of the 30 year policy term, the policy nominee will receive the full sum assured of ₹1 crore as death benefit specified by the plan.

Scenario 2: Aryan Decides to Surrender Policy

Supposes after 25 years, Aryan decides that he no longer wants to continue with the plan since all major liabilities have been met. In such a scenario, he can surrender the policy and receive the total premiums paid, which is ₹4.5 lakh (₹18,000 X 25 years)—along with any applicable interest or bonuses as per the policy conditions.

Earlier, when GST was applicable on life insurance premiums, the refund received under a TROP plan was slightly less than the total premiums paid. This was because the GST portion of the premium was paid to the government and not refunded to the policyholder. For example, if you paid ₹1 lakh as premium over the policy term, including GST, you would get back only the base premium amount (after deducting GST) at the end of the policy term.

Now, with the introduction of GST on life insurance premiums, policyholders are now liable get back the entire amount of premium paid when they surrender the TROP policy. This makes TROP plans even more rewarding. In simple terms, you will enjoy both life cover and a complete return of your payment, making these plans more valuable than before.

Following are the key features of term insurance with return of premium:

When it comes to important financial commitments such as buying term insurance with return of premium (TROP) plan, each person may have different objectives. This is significantly dependent on a number of personal factors such as your age, income source, lifestyle habits and medical conditions. Analyzing your financial profile based on these key parameters can help you find the right policy.

So, if you plan to purchase a term plan with return of premium, you have to examine the benefits offered against such factors.

Largely, TROP can be a preferable choice for people who fall under the following categories:

Unmarried

As an unmarried individual, you may have the financial responsibilities of your parents, especially if they are retired. If you have a term plan with return of premium, the maturity benefit ensures they receive a large sum of money either way.

In the unfortunate case of your demise, their expenses will be taken care of with the death benefit. You will have the peace of mind that they will be financially independent even when you are not around. In the case of surviving the policy, you can have the satisfaction of receiving back the premiums paid throughout the TROP tenure.

Married with No Children

If you are a married person, you may also want to consider a term plan with return of premium. In case your spouse is solely dependent on your income source, TROP may work for you. You can create a financial support system for them to secure their future against any eventualities. The maturity benefit offered at the end of the policy term will be a bonus.

Married with Children

A parent has a broad set of financial responsibilities to undertake for the well-being of their children. Saving up for their marriage, higher education and other life goals is a crucial aspect of your investment plans. In case you are the only earning member of the family, your spouse’s and children’s well-being is also to be considered.

It can be heavy on your pocket to manage the current expenses and put a large sum aside for the future. Therefore, the assurance of a maturity benefit with a term plan with return of premium can be helpful.

Senior Citizens and Retirees

A term plan with a money-back feature is beneficial for senior citizens or those who are planning for retirement. Apart from providing life cover to safeguard the insured’s family in their absence, this plan ensures they have funds upon retirement.

NRIs

NRIs can opt for term plans with the return of premium feature to support their dependants in India. Moreover, according to the DTAA (Double Taxation Avoidance Agreement) of India, NRIs can claim a tax deduction upon the maturity of their term insurance plan, with certain conditions applicable.
This ensures that the NRIs do not have to pay the tax twice for the same income: once in their residential country and the other in India.

A term insurance with return of premium provide you with a maturity benefit by returning the entire premium paid throughout the policy period. Therefore, it provides financial security in two ways: risk protection and financial assistance.
Here are some more reasons why you can choose a term plan with return of premium:

Take the following pointers into consideration when choosing a term insurance with return of premium feature that suits your unique needs:

Assess Your Needs

The first and foremost step is assessing your needs. You need to know what is the problem before finding a solution, similarly, to find the best suited TROP plan, you must identify your needs and then match those against available options. Calculate the life cover you require by considering your current income and evaluate that with your current liabilities and expected future liabilities. Then, decide the length of your policy term. Decide whether the policy term should match your retirement age or should it extend till your children complete their higher education and/or get married.

Another very important factor to consider when assessing your needs is your premium budget. You should be well aware of the fact that a term plan with return of premium feature may cost you a higher premium as compared to a basic term plan. So opt for a TROP policy only if you are certain that the premium amount payable will not negatively impact your budget.

Compare Features of the Available TROP Plans

Just like you compare various features before buying a mobile phone, it is imperative that you pay equal or more attention to the different TROP plan options available and their features too. A thorough comparative analysis will help you find the which policy works best for you in terms of life cover offered, policy tenure options, premium payment term/frequency, the structure of premiums to be returned (some offer 100% return while some might offer less than that), riders or add-on benefit available as well as key exclusions of the policy. It is only after this analysis will you be able to find a type of policy suited to your needs.

Evaluate the Insurer

The next step in choosing the best term plan with return of premium is evaluating the insurer. It is equally important to pay close attention to the insurance company you’re choosing. You may choose a plan in line with your budget and requirements but it may all go in vain if the insurer chosen doesn’t match the standards. It is important to check key features of the insurer such as claim settlement ratio, solvency ratio, etc. Another important point to consider is the insurance company’s customer services as these will play a major role at the time of making claims.

Compare Premium Costs

Premiums payable for a TROP policy are usually higher than a basic term insurance plan.This should be very clear in your mind. But even with this, you must draw a comparative analysis of the premiums offered by different insurance companies. Do take into account the premium payment frequencies offered by the insurer along with the discounts offered on the online purchases etc. It is only after such analysis will you be able to finalize a cost-effective term plan with return of premium.

Review Policy Terms

Once you’ve chosen the insurance company and the policy, do not miss out of reviewing the policy terms. Take the benefit if the free-look period and carefully read through the various terms and conditions along with the exclusions mentioned in the policy to reduce the possibility of unpleasant surprises in the future. Knowing such details beforehand can be extremely helpful at the time of making claims. Additionally, it is advised to consult a life advisor if you are new to the insurance and unable to finalize the best term insurance plan with return of premium.

Term insurance and term insurance with return of premium (TROP) are two types of life insurance policies currently available in India. While term plans are relatively well known, TROP is a relatively lesser known variant that offers some key benefits that are not available in a basic term plan. The below table highlights the key differences between a term plan and a term plan with return of premium.

Note: The above list of differences is illustrative and subject to periodic change.

Online Purchase Process

Purchasing a term insurance plan with a return of premium benefit online is simple and can be done by following these steps:

Start by exploring reputable insurance companies that offer term plans with a return of premium feature. Go to their respective online websites or seek comparison websites to compare their policies, coverage terms, and premiums.

Do keep in mind that term return of premium is often offered as an optional add-on, so an additional premium over and above the premium for the base term plan may be charged.

Once you compare the plans, choose the one which fits within your budget, protection requirements and your desired policy term.

Go to the insurer’s portal and fill out the application form online. You will be required to submit digital copies of personal, financial and health information so that the insurer can determine your eligibility.

Most insurers require a medical evaluation as part of the application process. This may be in the form of answering some simple health-related questions or a thorough medical examination and blood test, depending on the insurer’s procedure.

After they have checked your information and health screening results, the insurer will make a decision on your application. In case of approval, you will get the policy documents electronically for your review and digital signature.

Upon signing the policy documents, settle the first premium payment online by your preferred means of payment. Your policy becomes active once the payment is confirmed.

You are obligated to make the due premium payments on time during the policy term to keep the TROP policy in effect. Missing payments can lead to late fees being charged or termination of the policy without a refund in extreme cases.

Note: The above list of steps for online TROP purchase are illustrative only. There may be additional steps that may differ on a case by case basis.

Offline Purchase Process

To buy a term insurance plan with a return of premium benefit offline, follow the steps given below:

Step 1: Visit the insurer’s branch or contact an authorised agent to explore available return of premium plans.

Step 2: Choose the policy that matches your coverage needs and financial situation.

Step 3: Fill out the application form with your personal and health details.

Step 4: Submit the required KYC documents, such as ID, address, and income proof.

Step 5: Complete the medical check-up if requested by the insurer.

Step 6: Wait for the insurer to review and approve your application.

Step 7: Make the premium payment and collect your policy document once issued.

Note: The above list of steps for online TROP purchase are illustrative only. There may be additional steps that may differ on a case by case basis.

Axis Max Life Insurance stands out as a trusted insurer, backed by strong financial stability and consistent claim performance. Here are a few key reasons to consider buying a term insurance with return of premium (TROP) plan from Axis Max Life Insurance:

High Solvency Ratio

Axis Max Life maintains a healthy solvency ratio of 194% for FY25-26. This is higher than the IRDAI mandated 150%, reflecting its solid financial strength and ability to meet long-term commitments.

High Claim Settlement Ratio

The insurer has a strong track record of honouring claims promptly, with a 99.8%^ individual death claims paid ratio or claim settlement ratio.

Extensive Sum Assured

The company has a large individual sum assured in force, showing the trust of millions of policyholders.

Robust Asset Base

With total Assets Under Management of ₹200,000 Crore*, Axis Max Life demonstrates financial resilience and responsible fund management.

*As per financials closed on 30th June 2026

Term insurance with return of premium (TROP) offers the advantage of a money-back benefit if the policyholder outlives the policy duration. Here are some of the essential reasons why a TROP plan may be the right choice for you:

1. Life Cover with Maturity Payout: With a term insurance with return of premium plan, you get life cover, which financially secures your loved ones in your absence. Additionally, you get a survival benefit in the form of a maturity benefit when the policy term ends.

2. Save for Future Goals: TROP plans offer financial protection to the policyholder’s family by offering a death benefit in case of the policyholder’s unfortunate demise within the policy period. Additionally, under circumstances where the policyholder remains alive when the term period ends, the maturity payout received can help secure their family’s future goals.

3. No Medical Tests: If you are buying a TROP plan at a young age and do not have any pre-existing diseases, you may not have to appear for a medical test. However, that depends on the insurer’s discretion.

Flexible Premium Payment Options: Based on your preference, you can opt for monthly, quarterly, half-yearly or annual premium payment options.

Here is a detailed overview of the riders you can opt for when purchasing a term plan with return of premium:

A TROP calculator is an efficient financial tool that helps individuals estimate the premium amount and the maturity corpus they may receive if they survive the policy term. It helps them assess their coverage requirements, choose a premium amount within their budget, compare various plans and finalise one that meets their requirements.

Here are the details that an individual needs to input in a TROP calculator to get accurate results:

• Gender
• Age
• Life Cover
• Coverage Age
• Tobacco Use

The documents needed while buying a term insurance plan with return of premium may differ depending on the insurer. But generally, you will be asked to provide the following key documents for KYC purposes:

• Proof of age, like a birth certificate, school/college leaving certificate, marriage certificate, etc.
• Proof of address, like an electricity bill, ration card, etc.
• Proof of income like salary slip, copy of verified ITR, Profit & Loss statement, etc.
• Valid photo identification
• Recent passport-sized photograph

Note: The above list of documents are illustrative only and additional documents may be required based on the policies of the insurer.

It is important to review the eligibility requirements of a TROP plan. While these may differ slightly between insurers, most companies follow similar basic criteria as outlined below:

• Citizenship: Indian residents can buy TROP plans. NRIs and PIOs may also be eligible, based on the type of plan chosen.
• Age: Applicants aged between 18 to 65 years can apply. Premiums are typically lower for younger applicants.
• Health Condition: A medical check-up may be required to assess health risks. Always disclose your medical history honestly.
• Income: No fixed minimum income, but proof, such as salary slips or bank statements, is needed to ensure eligibility for the TROP policy chosen.
• Smoking Habits: Smokers and other tobacco users current as well as former must declare their status, as it can affect the premium payable due to changes in the risk profile of the applicant.

Note: The above mentioned TROP policy eligibility criteria are only meant for illustrative purposes. Additional eligibility criteria may be applicable as per the insurer’s policies as well as the choice of policy.

When buying term insurance with return of premium, you may get various attractive options from different insurers. Under such circumstances, you should avoid making the following mistakes to ensure optimal financial protection for your loved ones.
Check them out below:

When making a claim, below are the key steps to be followed:

Step 1: Inform Your Insurer

When your decide to surrender your policy, contact your insurance company to inform them that you want to claim your return of premium benefit.

Alternatively, the nominee can approach the insurer to raise a claim and inform about the death of the life insured covered as per the TROP policy.

Step 2: Fill Out the Applicable Form

The insurer provides a claim form or the surrender application form, as applicable. You will be required to fill out the applicable form and provide information like your policy number, personal details and the bank account number where the payout will be received.

Step 3: Submit the Required Documents

Send the filled out form and copies of the required documents. This normally consists of the original policy document, death certificate/police report/autopsy report (as applicable), valid identity proof, address proof and a cancelled cheque to verify the bank account where the payout is to be transferred.

Step 4: Get Your Submission Verified

The insurer will verify your information and ensure that the policy terms and conditions of raising a claim have been met. This is to verify that you are eligible to receive the return of premium benefit or the death benefit payout, as applicable.

Step 5: Receive the Payout

When your claim is approved, the insurance company will send the due amount (death benefit/return of premium plus applicable bonuses) to the bank account as per details provided.

Note: The above steps of raising a claim against a TROP policy are for illustrative purposes only. There may be additional steps required on a case by case basis as well as the internal policies of the insurer.