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Term Plan with Return of Premium (TROP)

Term Plan with Return of Premium (TROP)

Life is always unpredictable, so even if we eat healthily, don’t smoke or drink and live a healthy lifestyle, one cannot guarantee that we will live long. Any unfortunate situation can lead to the death of even a healthy person. So planning for a Term Insurance plan is always essential. However, a term insurance plan can provide us with higher returns in case of death of the policyholder. But if the policyholder outlives the tenure, then they would be left with nothing.

What is Return of Premium Term Insurance (TROP)?

TROP or Return of Premium Term Insurance works by paying a premium amount which is chosen as the sum assured. The premium tenure can range between 5 to 25 years. In Return of Premium Term Insurance unlike Term Insurance, the entire premium paid by the policyholder will be returned by the insurance company. Term insurance plan doesn’t offer maturity benefits, but Term Plan with Return of Premium offers maturity benefits in case of survival of the policyholder.

Let us take an example that you have taken a Return of Term Insurance plan of INR.50 lakh with a premium of 3500 per year which is of 10-year tenure in regular pay. So, in all the policyholder has paid 35000 INR in 10 years. So if they survive the maturity period, the insured will receive an amount of 35000 INR in the form of survival benefit.

Benefit of a Return of Premium Term Insurance Plan (TROP)

There are many benefits of Return of Premium Term Insurance Plan i.e. TROP. A few of them are listed below:

1) Benefit of Death:

If the policyholder dies due to any circumstances, then the nominee will receive an entire sum assured amount. So TROP essentially provides death benefits to the individual.

2) Benefit of Maturity or Survival:

If we pay the premium and the policyholder survives till maturity, then the premium paid amount will be returned to the policyholder whereas, in the case of the Term plan, there is no return of the premium amount.

3) Customizable with Riders to Suit Specific Needs:
The main advantage of the Term Plan with Return of Premium is that this policy is provided along with the rider as well. So by spending some extra bucks on top of the base policy, one can receive rider benefits like critical illness rider benefit, accidental rider benefit and term rider

4) Paid-up value:
If because of some reasons, the policyholder is unable to pay the premium amount, then the insurance company reduced the cover instead of stopping the policy.

5) Tax benefits:
The premiums deducted can be declared under section 80C of Income Tax return for Term Plan with Return of Premium.

6) Discontinuity Benefit:
In case a person wants to discontinue the policy, then he or she can do so by paying a certain amount of penalty. They will receive a premium amount paid after a few deductions.

Guide to Buying a Term Plan with Return of Premium (TROP)

There are various points that need to be noted before purchasing a Term Plan with Return of Premium:

  • Keeping into consideration all the financial expenses of our family, the amount for the sum assured should be chosen. This is to ensure that after our death the amount accumulated as the sum assured doesn’t fall short.
  • In Term Plan with Return of Premium, the premium amount considered should not be too high. It should be affordable.
  • Compare all the list of companies online and select the one which provides you benefits along with a good settlement ratio.
  • Check for the mode of premiums as either yearly, half-yearly, quarterly or monthly. Not all people can afford a one-time payment.

How a Return of Premium Term Insurance Plan (TROP) Works?

  • An individual is made to choose a plan which satisfies all the needs of family members.
  • The duration of the policy could range between 5 to 30 years, which totally depends upon the insurer and policy chosen.
  • After the maturity period, the insurance company returns the entire premium amount which was paid by the insured.
  • In case the policyholder dies within the tenure, then as per normal Term Insurance norms, the beneficiary or nominee or family members will receive the sum assured.
  • However, it is the sole responsibility of the individual to check for a company which offers the highest claim settlement ratio, and also satisfies many other needs of the individual.

How To File a Claim in Term Plan with Return of Premium (TROP)?

In case of death of the policyholder, the notification must be provided to the insurance company as soon as possible. The notification can be made in writing along with proof of death and date of death and all the relevant documents. The claim process should not be delayed, otherwise, they will need to face many questionnaires, and only after satisfaction of the reason for the delay, the claim process would be continued.

So one must follow the below key points properly:

  • Inform the insurer about the sudden demise of the insured.
  • After the claim gets registered, submit all the relevant documents to them
  • There is a surveyor which is from the company itself, and they will decide if the claim needs to be approved or not. If it’s a fit, then it would be approved, any reason for the cause of death which is against the clause, such cases would be rejected.
  • After contacting the insurance company and notifying them about death, there are certain documents that need to be arranged, in order to avoid claim rejection. Although the documents collected varies from company to company, there are certain common documents which are as below:
      1. Claim form which is duly filled
      2. Original policy document
      3. Original Death Certificate
      4. Post Mortem report or FIR (in case of unnatural death)
      5. Medical Certificate
      6. Age Proof (if age is not provided already)
      7. Legal proof of title of the claimant(for title dispute)

Documents Required to Buy a Return of Premium Term Insurance Plan (TROP)

Below documents are required to buy a Return of Premium Term Insurance Plan (TROP):

  • Age Proof: Passport, Voter ID card, Driving License, Birth Certificate, 10th /12th mark sheet.
  • Identity Proof: Passport, Voter ID Card, Driving License, PAN Card or Aadhaar Card
  • Address Proof: Passport, Driving License, Utility bills like Electricity Bill, Telephone Bill, Ration Card
  • Medical check-up (if required): Required especially for people aged more than 45 years of age, as a part of critical illness.
  • Passport size Photograph

The documents provided by the individual including proposal form, supporting documents and other information and any medical shreds of evidence if any provided by the individual forms a part of the contract of insurance and on the basis of this the insurance is issued.

Best Term Plans with Return of Premium (TROP) in India

Below is the list of best term plans with Return of Premium (TROP) in India:

  1. Max Life Premium Return Protection Plan
  2. ICICI Prudential LifeGuard
  3. Tata AIA Life Insurance iRaksha TROP
  4. MetLife Suraksha TROP
  5. Reliance Nippon Life Insurance
  6. HDFC Life Insurance Return of Premium

Frequently Asked Questions

Term insurance works by paying a sum assured to the individual in case of death of the policyholder whereas if the policyholder survives the tenure then no benefit is provided. Through TROP one can essentially receive the entire premium paid amount at the time of maturity along with the benefit of receiving the entire sum assured in case of death of the insured. The premium amount paid can vary from 5 to 25 years of age. For eg: if a person is searching for a cover of 20 lakhs and with a TROP plan, pays 2500 per year for 10 years, then after maturity the person will receive 25000 INR as survival benefit. But if that person dies in between the tenure, then the cover of 20 lakhs is provided to the nominee.

Term Insurance is a pure risk plan in which if the insured dies then only the amount is provided to the nominee. But nothing is provided in case the insured survives the policy tenure. TROP comes as a protector in such a case. It provides the entire premium amount paid to the policyholder.

Here there are the pros and cons of purchasing a Term Plan with Return of Premium:


  1. Survival benefit is provided in case the policyholder survives the policy tenure.
  2. In case the policyholder is not able to pay the premium amount after a certain period, then the insurance company returns the premium amount paid, but a certain amount is deducted as a penalty.


  1. Return of Premium Term Insurance is usually more expensive than a normal term insurance plan. So while thinking about saving plus obtaining a term plan, one could end up paying more.
  2. Beneficial would buy the term plan and invest the difference amount elsewhere which offers a better return and lower fees.

If the claimed amount is equal to or greater than Rs. 1,00,000, a KYC document is required.

Unlike other term insurance plan where the amount is received only in case the policyholder dies, here in Term Plan with Return of Premium, the amount is received even if the policyholder survives the tenure. This amount is received as a survival benefit to the individual. The entire premium amount is given back by the company. In case the person was able to pay money for a few years only, then the entire amount is refunded but there is a little penalty imposed on top of the amount received. Also, the amount received as a survival benefit is not taxable. Most of the payors offer an individual premium paying mode as yearly, half-yearly, quarterly and monthly.

As we grow in different stages of life, we aspire to dream high for ourselves and our family members. We think about the expenses, school fees, health fees, and many more. Money-back term insurance plan is nothing but a Term Plan with Return of Premium plan which is a contract between Term Insurance company and the individual and the individual agrees to pay some amount for a specific tenure with the guarantee of providing an assured amount to the family in case of his death. Also as the name money back, it will return all the premium paid to the policyholder during maturity.

Return of Premium Term Insurance plan is basically for anyone. The minimum entry age is 21 years for a Term plan with return of premium which extends up to 55 years. You can purchase the term plan with return of premium for a specific tenure with certain sum assured which purely depends upon the premium amount paid. The premium amount payable to women is lesser than men.

But most importantly below are the people who must definitely opt for Return of Premium Term Insurance Plan:

1) Single or Unmarried:

If you are single and you have your parents who are dependable on you. If they don’t earn and you are the only breadwinner of the house taking care of all the expenses, then a Term Plan with Return of Premium Plan is very essential in such case. Here, if you survive the policy tenure, then a premium amount will be paid back.

2) Married, but no kids:

If you are married and have no kids, then this plan is also essential for you. Suppose if your spouse is not working, in that case, you are the only support of the family. So through the Term plan with the return of premium, one can create a backup also, the premium paid doesn’t get wasted as it is received during maturity period.

3) Married with kids:

If you are married with kids, then you are solely responsible for your spouse and kids. Kids are fully dependent on their parents. So for their education, marriage, etc, a Term Plan with Return of Premium is essential. This will ensure that these expenses are sorted out in case of death, also the premium amount paid is not wasted in case of survival.