Term Plan with Return Of Premium: A Win-Win for the Survivor and the Beneficiary

A good offer is always welcome. People constantly look for ways to earn more money, to secure the futures of their family and themselves.

Author:IndiaFirst Life | Date:27 Jun 2023 | Time:13:45:00

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A good offer is always welcome. People constantly look for ways to earn more money, to secure the futures of their family and themselves.  

What if you found a term plan that benefits both, your family and yourself, even if you survive the term!  

Yes, such a policy exists, and it is called term plan with return of premium.  

What is Term Plan With Return Of Premium 

A term plan is a pure protection plan that provides life cover to the dependents in case of the policyholder’s sudden demise.  

A term plan with return of premium or TROP is one step better.  The policy, on maturity, reimburses 100% of the premiums you have paid if you outlive the term. In case of your unfortunate demise during the term, your beneficiaries receive the death benefit, i.e., the predetermined sum towards which you pay the premiums. 

In effect, TROP makes your policy virtually zero cost and yet, offers dual benefits of maturity benefit and death benefit in a single plan. 

How Term Plan With Return Of Premium Works 

Here is an example to show you how term insurance with return of premium works:

Sushila Singha is a single 30-year old mother with 2 kids. She is the only child of her ageing parents. As she is the sole breadwinner, she buys a term insurance with return of premium with a sum assured for Rs. 50 lakhs. 

She chooses a TROP plan with a 30-year premium payment term, for which she pays Rs. 20,000 per year. If she passes away during the policy term, her nominees will get the sum assured of Rs.50 lakhs as death benefit. However, if she survives the policy, she will get a maturity benefit of Rs. 6,00,000 (Rs.20,000 X 30). 

Benefits Of Term Plan With Return Of Premium 

Term plan with return of premium offers far more benefits than traditional term plans. 

100% premiums refunded if you outlive the policy term: Use this money to clear debts or fulfill aspirations. 

Retirement savings: The maturity benefit doubles as a retirement corpus which can be reinvested to earn higher returns. 

Assured financial security for your family: In case the policyholder passes away before the policy matures, the entire sum assured is paid to the beneficiaries and the policy is terminated. 

Protection against misfortunes: At any point of the term, if the policyholder is diagnosed with a terminal illness, your TROP plan may also have the provision of paying part of the sum assured and continue or terminate the policy (as the policy conditions may stipulate) even if the policy has not completed its term.  

Continued protection even on discontinued premium payment: Worried what will happen if you miss paying a premium? Well, if you have paid at least the first 2 annual premiums, your Term insurance with return of premium continues to be valid but the payouts will get affected and you will receive a lower death benefit or maturity benefit. You can choose to reinstate the policy to full benefits by paying all your outstanding premiums as well. 

Choose the percentage of returns: TROP charges a higher premium but you can still take advantage of its benefits by choosing to have either 50% or 100% of total premiums refunded, as allowed under your plan. 

Pay premiums as per your convenience: Pay monthly, quarterly, half yearly, yearly premium. 

GST savings: Term plans attract a GST of 18% whereas on term insurance with return of premium, the GST is 4.5% in the first year and 2.25% in the subsequent years. 

Tax savings: The premiums paid for the policy are eligible for tax deductions of up to Rs 1.5 lakh per annum under Section 80C of the Income Tax Act, 1961. The payout is exempt from income tax under Section 10 (10D) of the tax laws. 

Why to buy term plan with return of premium 

You’ve just read about the many advantages TROP plans offer. IndiaFirst Life Guaranteed Protection Plus Plan offers more, apart from return of premium!  

Whether you are looking for affordability, flexibility, or customization, this plan delivers on all fronts.  

  • Fulfill all your goals and ambitions, regardless of any unfortunate events such as death or terminal illness.  

  • Enhance your financial protection like never before with innovative coverage options.  

  • Stagger your premium payments, giving you the freedom to pay conveniently.  

  • Tailor the plan to match your commitments with a wide range of payout options.  

  • Adjust your sum assured as per your life stage, giving you the flexibility you deserve.  

  • Get coverage up to 99 years of age. 

Life is unpredictable but with term plan with return of premium, you are completely covered. While it may be slightly pricier than a standard term plan upfront, its long-term advantages make it an investment worth considering. TROP is tailor-made for individuals who desire a policy that not only protects their loved ones but also offers a monetary return. It is the perfect balance of protection and profit, providing peace of mind and a tangible benefit. 


IndiaFirst Life

Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 663 crore, is one of the country's youngest life insurance companies. Our key differentiators are our simple, easy-to-understand products that are fairly-priced and efficiently serviced.We offer a diversified suite of over 46 need-based products & Riders (as of 31st March 2022) catering to varied customer segments, leveraging multiple distribution capabilities and augmenting various investment options. In all, propositions under the categories of Protection, Assured Savings, Wealth, Pension, Health and Group Funds for Employee Liabilities form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and competitively priced with risk management being our core strength.

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