What will happen to Term Insurance with Return of Premium after maturity?

If the term insurance plan with the return of premium matures, you will receive a refund of the premium paid during the policy tenure.

What are the minimum eligibility criteria for a Term Plan with a Return of Premium?

The minimum eligibility criteria depend on the insurance company and the plan that you choose to buy. Usually, term plans with a return of premium are issued to individuals aged 18 years and above.

Can I add riders with a Term Plan with Return of Premium?

If the term plan with return of premium offers a choice of riders, you can add suitable riders to the coverage and enhance the scope of your policy. However, each rider would come at an additional premium.

Is a critical illness rider available with a Term Plan with a Return of Premium?

The availability of critical illness riders depends on the plan that you choose. For instance, Bajaj Allianz Life Smart Protection Goal offers the critical illness rider with the term plan with the return of a premium option.

Can you get your money back from a term insurance plan on maturity?

If you buy a pure protection term plan which has no maturity benefit, you will get nothing on maturity. However, if you choose the return of premium term plan, the premium that you had paid would be refunded on maturity.

What is the death benefit under the return of premium term insurance plan?

The death benefit is usually the chosen sum assured which is payable if the insured passes away during the policy tenure.

What is the premium payment frequency under a TROP?

The premium payment frequency depends on the plan that you choose. Usually, TROPs allow four premium payment frequency options – annual, half-yearly, quarterly and monthly.

Will a return of premium term insurance be more expensive?

Compared to a pure term insurance plan, a return of premium term insurance policy would be more expensive. This is because pure-term plans do not offer any maturity benefit but the return of a premium term plan refunds the premiums paid on maturity.

Will smoking affect the term insurance with the return of premium?

Yes, smoking affects the premium of term insurance with the return of the premium. It increases the premium paid for the policy because smoking increases your mortality risk.

How much is the premium for 1 crore term insurance with Return of Premium?

The premium depends on your age, lifestyle habits, medical condition, policy details selected and other risk factors. For instance, if you are a 30-year-old male who buys Bajaj Allianz Smart Protection Goal* for a term of 25 years and chooses to pay regular premiums every year, the first year premium would be ₹5,847 plus taxes assuming you don't smoke, the sum assured is ₹50 lakhs and you have selected the return of premium option without any riders.

Should I buy a regular term insurance plan or a term plan with a return of premium?

The choice depends on your needs. If you want term insurance coverage with the option of a refund of premiums on maturity, you can choose the return of premium term plan. On the other hand, if you are looking for only protection at a cost-effective rate, you can buy a regular term insurance plan.

Claim Settlement Ratio of 99.23%^~

Term Plan with Return of Premium (TROP)

There are different types of term insurance plans. A term plan with a return of premium is one such plan which is different from other plans as it has a maturity benefit. Let’s understand what the plan is about.

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What Is A Term Plan With A (TROP)?
How Does A Term Plan With A (TROP) Work?
Why Choose a Term Plan with Return of Premium Option?
Who Can Buy Term Plan With Return Of Premium (TROP)?
Term Insurance Plans by Bajaj Allianz Life
What Are The Features Of A Term Plan With A Return Of Premium?
Return Of Premium Option With Limited Pay
What Is The Difference Between Term Insurance And Term Insurance With Return Of Premium?
How to choose the best Term Insurance with Return of Premium?
Documents Required To Buy Term Insurance
How Much Term Insurance With Return Of Premium Cover Do I Need?
How To Buy A Term Plan With Return Of Premium Online?
Why Bajaj Allianz Life Insurance ?
FAQs

What is a Term Plan with a Return of Premium (TROP)?

A term plan with a return of premium, also called TROP, is a term plan which offers a maturity benefit. It works as a normal term plan with just an addition of maturity benefit. Under TROP, if the life insured passes away during the policy tenure, the death benefit is paid.
On the other hand, if the insured survives the policy tenure and the policy matures, the premiums paid over the policy tenure are refunded, subject to the terms & conditions of the policy, hence the name¹.

How does a Term Plan with a Return of Premium work?

Under a term plan with a return of premium, you choose the following details –

The sum assured
Policy tenure
Premium payment term
Premium paying frequency
Riders (if any)
Any other optional features that are available and you want to choose

Depending on these factors, your age and other risk parameters, the premium is calculated. You pay the premium over the chosen premium payment term and in the chosen frequency. If the life insured passes away during the policy tenure, the death benefit is paid. On the other hand, if the plan matures and the insured is alive, the premiums paid are refunded.

Let’s take an example.

Ravi, aged 30 years, buys the Bajaj Allianz Life Smart Protection Goal Plan* and chooses the return of premium option. The plan details are as follows –

Term	Details
Sum assured	₹50 lakhs
Policy term	25 years
Premium payment term	25 years
Premium payment frequency	Annual
Optional riders or other benefits	Nil
1^st Year Premium payable	₹5,847 plus taxes

Instance 1 – Ravi passes away after 10 years.

Solution – His nominee receives a death benefit of ₹50 lakhs and the plan is terminated.

Instance 2 – Ravi survives the policy tenure of 25 years

Solution – The plan refunds his premium and he receives a maturity benefit of ₹1,55,151 on maturity.

Why Choose a Term Plan with Return of Premium Option?

Here are some reasons which make the term plan with return of premium a good option –

Life insurance coverage⁶

A term plan with a return of premium offers financial security in the face of a premature demise. It allows you to choose a high sum assured so that your family receives adequate financial support in your absence. The death benefit offered by the plan can help your family in meeting their lifestyle expenses and also their financial goals. This offers peace of mind to you and your family that their financial needs will be taken care of.

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Maturity benefit⁶

The maturity benefit paid by the return of the premium plan may make it a win-win combination. While the insurance coverage provides financial security during the tenure, the refund of premiums pays back the money you paid for the coverage on maturity.

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Tax benefits

Like other life insurance plans, you get tax benefits too. The premiums paid for the policy qualify as a deduction under Section 80C up to ₹1.5 lakhs under old tax regime, subject to specific terms and conditions³. The death benefit received is completely tax-free⁴. The maturity benefit received also enjoys tax exemption under Section 10(10D) subject to certain terms and conditions⁴.

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Peace of mind

Knowing that your family is financially secure in your absence gives you peace of mind. You don’t have to worry about unforeseen eventualities which might cause your family a financial strain.

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Fulfilment of financial goals⁶

With the death or maturity benefit received, you or your family can fulfil their relevant financial goals like children’s education, marriage, debt repayment, buying a home or a car or even retirement planning.

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Who Can Buy Term Plan with Return of Premium (TROP)?

Individuals looking to secure financial security for their family in their absence and who also want a maturity benefit can opt for the term plan with the return of premium option. However, you should fulfil the eligibility criteria specified by the insurance company to get the coverage.

Term Insurance Plans by Bajaj Allianz Life

What are the features of a Term Plan with a Return of Premium?

Some of the features of the term plan with return of premium are as follows –

The plan covers the risk of premature demise during the policy tenure
The premiums are refunded on maturity
You can choose a coverage level that aligns with your coverage needs
The premiums are affordable. Moreover, many plans offer you the choice of regular, limited or single premium. Different premium payment frequencies are also allowed like annual, half-yearly, quarterly and monthly.
Many plans offer optional riders to enhance the scope of protection.

Return of Premium Option with Limited Pay

You can choose the return of premium option with your basic term insurance plan, if the option is available, by paying an additional premium. This option ensures a maturity benefit if the plan matures. Moreover, if you choose the limited pay option, you pay premiums for a limited period while the coverage lasts longer.

For instance, if you choose a limited pay of 20 years in a policy whose term is 30 years, you pay premiums for 20 years while the coverage continues till 30 years.

What is the difference between Term Insurance and Term Insurance with Return of Premium?

The difference between term plans and term plans with return of premium can be assessed from the following table–

Term plan	Term plan with return of premium
Only death benefit is paid under term plans. If the plan matures, no benefit is paid²	If the insured passes away during the policy tenure, the death benefit is paid. On the other hand, if the insured survives the tenure, the total premiums paid are refunded as a maturity benefit².
The premium is low²	The premium might be a little higher compared to pure term plans¹
If you discontinue premium payments, the plan will not acquire any paid-up value.⁶	If you stop paying premiums, you don’t lose the plan benefits. The plan benefits are reduced if at least 2 years’ full premiums have been paid⁶. You can continue the coverage at the reduced value which is called the paid-up value⁶.
There’s no surrender value under the plan⁶	You can also exit the coverage and get a surrender value if you have paid at least 2 full years’ premium⁶

How to choose the best Term Insurance with Return of Premium?

To choose the best term insurance with a return of premium, here are some points that you can consider –

1. Coverage offered

Check the coverage offered. Usually, most plans offer similar coverage but there might be value-added benefits like inbuilt riders or optional coverage features. Choose a plan which offers a comprehensive scope of protection which you need.

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2. Premium amount

Compare the premium amounts across different plans vis-à-vis the coverage offered. Choose a plan offering the most inclusive coverage at the most competitive premium rate.

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3. Rider benefits

Look for the optional riders offered and their premium. Choose a plan that offers the riders that you need and that too at affordable premium rates.

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4. Available discounts

Insurers might offer premium discounts on term plans with return of premium option to lower the premium outgo. Look for these discounts and choose a plan offering the maximum possible discount for the most savings.

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5. Claim Settlement Ratio

Check the Claim Settlement Ratio of the insurance company. A high ratio is recommended since it depicts that the insurer settled most of the claims made by the customers and fosters trust in the company.

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Documents Required To Buy Term Insurance

When you buy a term life policy, you are required to submit a set of documents. These include-

Proposal form

photographs

Proof of address

Proof of age

Proof of income

Medical report

Any other document

filled and signed by the proposer

Recent colored photographs

Aadhaar card, voter’s ID card, passport, driving license, recent utility bills, Property Deed, Registered Rent Agreement, etc.

birth certificate, Aadhaar card, Voter’s Identity card, PAN card, Passport, School certificate, Driving License, etc.

salary slip, form 16, financial statements of the business, bank statement, etc.

Medical examination report (if applicable)

Any other document required by the insurance company

How much Term Insurance with Return of Premium cover do I need?

The choice of coverage depends on different factors. Some of these factors are as follows⁵–

Age

When you are young, you might have limited financial responsibilities. However, the responsibilities increase as you grow older. As such, choosing a higher sum assured is better to take care of future needs.

For instance, if you are 30 years old and will retire at 65, you can work for 35 years. If your annual income is ₹10 lakhs, your family will lose ₹3.5 crore on your premature demise. Thus, you need a coverage of ₹3.5 crores. On the other hand, if you are 40 years old and have 25 more working years, the loss would reduce to ₹2.5 crore (25 years X ₹10 lakhs). Thus, at an older age, the coverage required would be ₹2.5 crore.

Number of dependents

The number of financial dependents also affects the coverage need. If you have many of dependents, you would need a higher coverage to take care of multiple responsibilities that you might have.

Basic lifestyle needs

Your coverage also depends on your lifestyle expenses also determine the coverage amount. If your lifestyle expenses are high, you need a high sum assured to meet them. The same holds true if you have limited expenses.

Inflation rate

Inflation is the rise in the price of goods and services. As inflation rises, so do your financial needs. That is why, your coverage should be optimal to take care of the expenses which might increase due to inflation.

Goals
Your financial goals would also affect your coverage requirement. The more goals that you have the higher the financial corpus that you would need and vice versa.
Existing assets and liabilities

The existing investments and debts that you have determine your coverage needs. If you have existing assets or investments, your coverage requirement would be lower. On the other hand, if you have liabilities, your coverage would be higher so that the liabilities can be met.

How to buy a Term Plan with Return of Premium online?

You can buy a term plan with a return of premium online in some simple steps. These steps are as follows –

Visit Term Insurance with Return of Premium Page available on the website of Insurance company
Enter the required details like name, age, location and contact information
Enter your education details, smoking habits, occupation and annual income as may be required
Enter the coverage amount, policy term and premium payment term basis your choice and suitability
Choose the return of premium option
Choose optional riders, if required
If there’s a requirement for a medical check-up, complete the checkup formalities
Pay the premium and the proposal would be submitted

The insurance company would then underwrite the proposal form and issue the policy, if everything is found satisfactory.

99.23%

Claim Settlement Ratio^~

1 Day

Claim Approval^%

AAA

CARE Stable Rating^$

₹1,09,829Cr

Assets Under Management (AUM)^**

4.19 Cr

Number of Lives Covered^#

432%

Solvency Ratio^{^}

Disclaimer:^~Individual Death Claim Settlement Ratio for FY 2023-2024, ^%96.70% of non-investigative individual claims approved in one working day for FY 2023-24. 1 day is counted from date of intimation of claim before 3 PM on a working day (excluding Non-NAV days for ULIP) at Bajaj Allianz Life offices, ^$For details refer to press release published by CARE, ^**All figures as on 31 March, 2024, ^{^}Solvency ratio 432% as at 31 March 2024 against IRDAI mandated 150%, ^#Individual Group.¹ Source: Bajaj Allianz Life Public Disclosure

Term Insurance with Return of Premium FAQs

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References:

https://www.zeebiz.com/personal-finance/insurance/news-refund-of-premiums-how-do-term-plans-with-rop-work-should-you-opt-for-it-stst-253596
https://www.etmoney.com/blog/what-is-a-term-insurance-with-return-of-premium-should-i-buy-it/
https://incometaxindia.gov.in/tutorials/20.%20tax%20benefits%20due%20to%20health%20insurance.pdf
https://www.livemint.com/money/personal-finance/how-life-insurance-policies-are-taxed-11665145664260.html
https://indianexpress.com/article/business/sum-insured-life-cover-amount-the-most-crucial-factor-when-buying-term-life-insurance-7553661/
https://www.forbes.com/advisor/in/life-insurance/term-insurance/term-plan-with-return-of-premium/

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Disclaimers:

Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

^~Individual death claim settlement ratio FY- 2023-2024

^%99.70% of non-investigative individual claims approved in one working day for FY 2023-24. 1 day is counted from date of intimation of claim before 3 PM on a working day (excluding Non-NAV days for ULIP) at Bajaj Allianz Life offices.

^{^}Solvency ratio 432% as at 31 March 2024 against IRDAI mandated 150%

^$For details refer to press release published by CARE

^**All figures as on 31 March, 2024

^#Individual & Group

^bTax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

^a Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions

^d 5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium, 5% Discount for salaried customers, applicable only on first year’s premium, 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency, applicable only on first year’s premium.

^e Above illustration is for Bajaj Allianz Life Smart Protection Goal - A Non Linked, Non Participating, Individual Life Insurance Term Plan (UIN: 116N174V03) considering Male aged 25 years | Non-Smoker | Standard Life | Policy term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Total Sum Assured opted is Rs. 1,00,00,000 | Total Premium - Rs. 2,08,143 (1st Year Premium is Rs- 6535/- and 2nd Year onwards Rs -6952/- )| Online Channel | This is exclusive of discount for salaried customers and for customer's first individual life insurance policy | medical rates | Yearly Premium Payment Mode | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only.

^fProduct feature/benefit mentioned above are dependent on optional benefit, if selected.

^gHSAR – High Sum Assured Rebate is subject to policy terms and conditions

^hPremium rate applicable to female life will be based on the premium rate of 3 years younger male

Bajaj Allianz Life Term Insurance with tax benefit up to Rs 46,800

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Bajaj Allianz Life Term Insurance with tax benefit up to Rs 46,800^*

99.23% Claim Settlement Ratio^~

Premium Holiday¹

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BEWARE OF SPURIOUS PHONE CALLS AND FICTITIOUS / FRAUDULENT OFFERS

IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.

CIN: U66010PN2001PLC015959 | Registered Office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune-411006, Maharashtra

Email: customercare@bajajallianz.co.in | Tollfree: 1800 209 7272,

Disclaimer: Images used on this website and the models photographed in them are for representative purposes only and are not indicative of anyone's personal thoughts or ideas.

The Logo of Bajaj Allianz Life Insurance Co. Ltd. is provided on the basis of license given by Bajaj Finserv Ltd. to use its “Bajaj” Logo and Allianz SE to use its “Allianz” logo.

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Disclaimer

For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale. The terms and conditions of product/plan as contained in the Policy Document issued by the Company is available on the Web Site. The names of the Company, Products/Plans/funds do not indicate the quality and its future prospects or returns. IN ULIPs, THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. Unlike traditional products, Unit linked insurance products are subject to market risk, which affect the Net Asset Values & the customer shall be responsible for his/her decision. Tax benefits are as per the prevailing Income Tax Laws including the Income Tax Act, 1961 and are subject to change from time to time. Goods and Services Tax will have to be borne by the Policyholder as per applicable rates. All other charges shall be levied in accordance with the terms and conditions of the policy.

This calculation and results displayed are based on information provided and certain assumptions about the rates of return. It is for assistance only and does not constitute an offer or solicitation. It is not intended to be and must not alone be taken as the basis for an investment decision. Kindly note that the returns are only illustrative and they are not guaranteed. The returns do not indicate the upper or lower limits of the return that you may get with your policy and the value is dependent on a number of factors including future performance. Bajaj Allianz Life Insurance Company Limited shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information reported by the calculator.

¹©2021 Morningstar. All Rights Reserved. The Morningstar name and logo are registered marks of Morningstar, Inc. The information, data, analyses and opinions ("Information") contained herein: (1) include the proprietary information of Morningstar and its content providers; (2) may not be copied or redistributed except as specifically authorized; (3) do not constitute investment advice; (4) are provided solely for informational purposes; (5) are not warranted to be complete, accurate or timely; and (6) may be drawn from fund data published on various dates and procured from various sources. Morningstar, its affiliates, and its officers, directors and employees shall not be liable for any trading decision, damage or any other loss arising from using the Information. Please verify all of the Information before using it and do not make any investment decision, except upon the advice of a professional financial adviser. Past performance is no guarantee of future results. The value and income derived from investments may go down as well as up

Disclaimer

Term Plan with Return of Premium (TROP)

What is a Term Plan with a Return of Premium (TROP)?

How does a Term Plan with a Return of Premium work?

Why Choose a Term Plan with Return of Premium Option?

Life insurance coverage6

Maturity benefit6

Tax benefits

Peace of mind

Fulfilment of financial goals6

Term Insurance Plans by Bajaj Allianz Life

What are the features of a Term Plan with a Return of Premium?

Return of Premium Option with Limited Pay

What is the difference between Term Insurance and Term Insurance with Return of Premium?

How to choose the best Term Insurance with Return of Premium?

1. Coverage offered

2. Premium amount

3. Rider benefits

4. Available discounts

5. Claim Settlement Ratio

Proposal form

photographs

Proof of address

Proof of age

Proof of income

Medical report

Any other document

How much Term Insurance with Return of Premium cover do I need?

Why Bajaj Allianz Life Insurance ?

Claim Settlement Ratio~

Claim Approval%

CARE Stable Rating$

Assets Under Management (AUM)**

Number of Lives Covered#

Solvency Ratio^

Term Insurance with Return of Premium FAQs

Life Insurance Guide

Articles

Calculators

Podcasts

Videos

Customer Speaks

Popular Searches

Life insurance coverage⁶

Maturity benefit⁶

Fulfilment of financial goals⁶

Claim Settlement Ratio^~

Claim Approval^%

CARE Stable Rating^$

Assets Under Management (AUM)^**

Number of Lives Covered^#

Solvency Ratio^{^}