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Life Cover + 17% Discount** + Save Tax*!
Under Section 80C & 10(10D) of Income Tax Act, 1961*
Get Life Cover + Save tax up to Rs 46,800*
₹2 Cr Term Plan
@ 25/Day²
Free Health Management Services
upto ₹ 14,000 p.a.^

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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Written ByShruti Gujarathi
AboutShruti Gujarathi
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Shruti Gujarathi has 5 years of experience in the BFSI sector, and as Manager- Digital Marketing at Bajaj Allianz Life Insurance, manages digital and content marketing. She has had hands-on experience in content strategy, performance marketing and Strategic Alliances over a career spanning 10 years.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.

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

1st 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 –

Parents

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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Tax Payers

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 –

  1. The plan covers the risk of premature demise during the policy tenure
  2. The premiums are refunded on maturity
  3.  You can choose a coverage level that aligns with your coverage needs
  4. 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.
  5. 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 value 6.

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’ premium 6

 

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 –

Parents

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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Tax Payers

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-

Proof of Address Proof of Address

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 –

  1. Visit Term Insurance with Return of Premium Page available on the website of Insurance company
  2. Enter the required details like name, age, location and contact information
  3. Enter your education details, smoking habits, occupation and annual income as may be required
  4. Enter the coverage amount, policy term and premium payment term basis your choice and suitability
  5. Choose the return of premium option
  6. Choose optional riders, if required
  7. If there’s a requirement for a medical check-up, complete the checkup formalities
  8. 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. 

Why Bajaj Allianz Life Insurance?

Bajaj Allianz Life, one of India's leading Private Life Insurers, is committed to offering value-packed and innovative products to help you achieve your Life Goals.

99.23%

Claim Settlement Ratio~

1 Day

Get 1 Day Claim Approval%

AAA

Stable Rating by CARE$

₹1,21,338 Cr

Assets Under Management (AUM)**

4.09 Cr

Number of Lives Covered#

432%

Solvency Ratio of 432%^

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 August 2024 | ^Solvency ratio 432% as at 31 March 2024 against IRDAI mandated 150% | #Individual & Group.

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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/
Bajaj Allianz Life Insurance Security
Bajaj Allianz Life is a trusted insurance partner Reviewed by Life Insurance Experts
Bajaj Allianz Life is a trusted insurance partner

At Bajaj Allianz Life, we are here to support you in building a secure and worry-free future. With over 20 years of experience, we provide a variety of life insurance plans, including protection, retirement, savings, investment and health, to meet your unique needs.

Disclaimers:
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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.

f Product feature/benefit mentioned above are dependent on optional benefit, if selected.

g HSAR – High Sum Assured Rebate is subject to policy terms and conditions

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

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I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

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Disclaimer

%%Above illustration is for Bajaj Allianz Life eTouch- A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N172V04) considering Male aged 24 years | Non-Smoker | Policy Term(PT)– 30 years | Premium Payment Term (PPT)– 30 years | Sum Assured opted is Rs.1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,051. 2nd Year onwards premium Rs. 6,460. Total Premium Paid is Rs. 1,93,391 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 45, Income Payout Percentage:55) | Premium shown above is inclusive of Online Discount only and 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.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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

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Disclaimer

*Above illustration is for Bajaj Allianz Life eTouch II - A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N198V01) considering Male aged 25years | Non-Smoker | Policy Term(PT)– 30 years | Premium Payment Term (PPT)– 30 years | Sum Assured opted is Rs.1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 5,092. 2nd Year onwards premium Rs. 5,520. Total Premium Rs. 1,65,172 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 40, Income Payout Percentage: 60). Income payout instalment opted for 40 years | Premium shown above is inclusive of Online Discount only, no other discounts have been considered and 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. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

$Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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