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Term Plan with Return of Premium (TROP) is a type of term insurance plan that operates in the same way as a term plan does. It provides financial safety and assurance to the family if anything were to happen to the insurer. However, it is different from a traditional term plan in one way. The difference lies in how the premium, for the amount chosen as the sum assured, is paid. Premium is usually paid for anywhere between 5 years to up to 25 years. In a term plan with a return on premium, the entire premium amount is paid back to the policyholder at maturity. In a general term plan, money is given out only in the event of death, etc., occurring to the insurance holder.
To understand the policy scheme better, an example can be taken. Mr. X has taken out a term plan with a return of premium (TROP) for a sum assured of INR 1 crore. The premium to be paid is INR 25,000 per annum for 30 years. If Mr. X dies before 30 years, the family members will receive the entire sum assured, but if Mr. X were to survive the 30 years, the TROP would pay INR 7,50,000 (INR 25,000x30) back on maturity.
It is essential to make a policy comparison to fully understand which policy offers which features. However, for most policies, the general characteristics are listed below.
Type of Plan | Protection Plan |
Policy Duration | 5 to 35 years |
Entry Age | Entry age will depend on the maturity age and term of the policy. In most plans, it is 18 years. |
Age at Maturity | Up to 75 years |
Payment of Premiums | Lump-sum, annually, half-yearly, quarterly and monthly |
Nomination | TROP offers a nomination facility. |
Free-look period | The free-look period is usually 15 days from the day documents are submitted. |
Grace period | The standard grace period is 30 days for payment of premium from the due date. It can be shorter if the premium is paid monthly. |
Sum assured | The sum assured limit is different from provider to provider and is also subject to the approval of the company. |
There are several insurance providers that have a Term Plan with Return of Premium. Some of the best in the market, along with their features, have been listed below to make it easy to compare policies
Features | Max Life Insurance Premium Return Protection Plan | Aviva i-Shield Return of Premium | Aegon Life iReturn | Metlife Suraksha TROP |
Entry Age | 21 to 55 years. Maturity age is 75 years | 18 to 55 years. The maturity age is 65 years. | 18 to 65 years. The maturity age is 75 years. | 18 to 50 years. Maturity age is 65 years |
Policy Term | 20 to 30 years | 10 to 25 years | 5 to 20 years | 5 to 20 years |
Sum Assured | INR 5 lakh to INR 1 crores | INR 15 lakh to INR 6 crores | INR 3 lakh to INR 4 crores | INR 2,00,000 to unlimited |
Disclaimer: *All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
The list of the different types of term plans described below will be appropriate for policy comparison, at the time of purchase of a policy.
This is the primary type of term plan where the sum assured is fixed, and the benefits of the plan are paid at the death of the insured, to the nominee
This is the type of term plan where the total premium amount is paid out if the insured survives the policy tenure
An Increasing Term Plan, as the name says, is a type of plan where there is the option to increase the sum assured, annually. The increase is done over the tenure of the policy, and the premium remains unchanged. The premium for this type of plan is on the higher side
This type of term plan is the complete opposite of an Increasing Term Plan. The sum assured of the plan keeps on decreasing over the tenure of the policy. A Decreasing Term Plan is particularly useful when the insured has taken out a big loan like a house loan or is paying EMIs
A Convertible Term Plan can be converted to a different kind of plan. For example, a basic term plan can be changed into an endowment plan after 20 years
A term plan with rider options like accidental death cover, critical illness cover, etc. is called a term plan with riders
An essential term plan makes sure that the sum assured is paid to the nominee of the insured, in case of death. However, there are inevitable deaths, which are excluded from policy schemes. It should be noted that the below-stated deaths are not the same for all plan options, and one should make a proper policy comparison before deciding on one.
The list of the different types of term plans described below will be appropriate for policy comparison, at the time of purchase of a policy.
Deductions of up to INR 1.5 lakh can be availed under section 80C for the premium paid to the policy every year. Typically deductions are provided on investments like PPF, tax-saving FDs and NSC, etc
When an insurance policy claim is approved by the insurer, and the sum assured is paid out to the family members of the insured, the amount is exempt from tax under section 10 (10D), subject to conditions
Section 80D offers deductions of health insurance premiums paid of up to INR 25,000. For senior citizens above the age of 60 years of age, the deduction is INR 50,000
Most insurance providers allow customers to look through the plan options, compare policies, and also buy a term plan online. The step-by-step guide to doing the same as follows.
To get the best term plan with return on premium, one must compare all the plan options available in the market. Fortunately, with the help of premium calculators, the process of policy comparison has become easier. There are certain factors to look out for when comparing policies
A claim settlement ratio is a ratio between the number of claims raised and the number of claims approved by the insurer. The IRDA publishes the claim settlement ratio of all major companies, every year. A good ratio is proof that the insurer is quick in claim settlement
Terminal illnesses like cancer or brain surgery is a major burden on the insurer. If the plan allows for the addition of critical illness, it is a significant advantage. Also, this cover pays out immediately post the diagnosis
The premium is the first thing everyone looks into. Using the policy calculators provided by most insurance providers, comparing policies becomes easy. Choosing a policy with the most coverage at the least premium
The premium waiver is done if the insurance holder contracts a terminal illness. The insurance provider waives off all the future premium payments. This is a useful feature to have in policies
Looking at the solvency ratio of the company will provide an idea of whether the company will be able to entertain any claims. As per IRDA guidelines, the companies must maintain a minimum solvency ratio of 1.5
Most insurance policies currently have the feature of a regular payout along with a lump-sum payment. If the option for a regular pay-out is available, it can be opted for
There are several insurance providers in the market, but there are certain that can be counted among the top ten companies providing Term Plan with Return of Premium. The list below can be used to compare policies and find the best one.
Top Ten Term Insurance Providers |
Aegon Life |
Aviva Life Insurance |
Bajaj Allianz |
HDFC Life Insurance |
ICICI Prudential |
LIC |
Max Life |
PNB Metlife |
SBI Life Insurance |
TATA AIA Life Insurance |
Disclaimer: *All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
Insurance Company | The premium for INR 1 crore |
Aegon Life | INR 757 per month |
AVIVA Life Insurance | INR 971 per month |
Bajaj Allianz | INR 1,128 per month |
HDFC Life | INR 1,023 per month |
ICICI Prudential | INR 1,017 per month |
IDBI | INR 1,013 per month |
Max Life | INR 914 per month |
PNB Metlife | INR 955 per month |
SBI Life | INR 2,987per month |
TATA AIA | INR 1,002 per month |
Disclaimer: *All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply