Looking for a term plan with return of premium in 2025? You’re not alone.
Term insurance is one of the most affordable ways to secure your family’s future, but many people hesitate because traditional term plans don’t offer any returns if you survive the policy period. That’s where a return of premium (ROP) term plan steps in—giving you both protection and your money back at maturity.
In this guide, we’ll cover everything you need to know about term plans with return of premium, how they work, their benefits, and whether they’re the right choice for you.
🔍 What Is a Term Plan With Return of Premium?
A term plan with return of premium (ROP) is a type of term life insurance where, if the policyholder survives the term, the premiums paid are returned at the end of the policy tenure. This makes it a life cover with refund on maturity, combining the security of life insurance with a money-back guarantee.
💡 Real-Life Example:
Let’s say you buy a 20-year ROP term plan with a sum assured of ₹50 lakhs. You pay ₹15,000 per year in premiums. If you pass away during the policy term, your nominee receives ₹50 lakhs. But if you survive all 20 years, you get back ₹3,00,000 (₹15,000 × 20)—a full refund of premiums.
🛡️ Key Features of a Return of Premium Term Insurance Plan
✅ Death Benefit and Maturity Benefit
Death Benefit: Your nominee receives the full sum assured if you pass away during the policy term.
Maturity Benefit: If you survive, you receive a refund of all premiums paid (excluding taxes and rider charges).
✅ Pure Protection With Premium Return
This plan offers pure life cover along with premium return, making it ideal for those who want their money back if unused.
✅ Policy Tenure With Return Options
Available in flexible policy terms—typically 10 to 40 years.
✅ Surrender Value in Term Insurance
Most ROP plans offer a surrender value, which is the amount you get if you cancel the policy before the end of the term. This is not available in regular term plans.
🏆 Best Term Insurance With Return of Premium in 2025
While plans and insurers vary, some top-rated term life insurance with return of premium options in 2025 include:
| Insurance Company | Plan Name | Sum Assured | Max Policy Term | Key Benefit |
|---|---|---|---|---|
| LIC of India | Jeevan Kiran | ₹25L–₹2Cr | Up to 40 years | High maturity benefit |
| HDFC Life | Click 2 Protect ROP | ₹50L+ | Up to 40 years | Optional riders |
| Max Life | Smart Secure Plus | ₹25L+ | Up to 50 years | Terminal illness payout |
| ICICI Prudential | iProtect Return of Premium | ₹50L+ | Up to 40 years | Accelerated death benefit |
These plans offer a low-cost return of premium term plan structure with optional add-ons for critical illness and disability.
🧾 Benefits of Term Insurance Policy With Premium Return
1. Financial Security + Money-Back Guarantee
If something happens to you, your family is protected. If nothing happens, you don’t lose your money. That’s a win-win.
2. Tax Benefits on Term Insurance
You can claim deductions up to ₹1.5 lakh under Section 80C and get tax-free payouts under Section 10(10D) of the Income Tax Act.
3. Mental Peace and Disciplined Savings
People often skip traditional term plans because there’s no maturity benefit. Term plan with maturity benefit ensures you stay financially disciplined and receive a lump sum later.
4. Survival Benefits
A term insurance with survival benefits gives you a refund of premiums—ideal if you believe you’ll outlive the policy term.
🤔 Is a Return of Premium Term Plan Right for You?
Let’s break it down:
| Criteria | ROP Term Plan | Regular Term Plan |
|---|---|---|
| Premium | Higher | Lower |
| Maturity Benefit | Yes | No |
| Death Benefit | Yes | Yes |
| Surrender Value | Yes | No |
| Ideal For | Conservative investors who want risk-free savings | Pure protection seekers |
If you’re looking for insurance with money-back guarantee, and are willing to pay a slightly higher premium, this plan could be the perfect fit.
📝 Things to Keep in Mind Before You Buy Term Plan With Return of Premium
✅ Compare Plans
Don’t settle for the first plan you see. Compare the sum assured with premium return, features, and riders.
✅ Check Claim Settlement Ratio
Stick with insurers that have a high claim settlement ratio (95%+ is ideal).
✅ Understand Policy Terms
Read the fine print—what is covered, what is excluded, and when you can claim surrender value in term insurance.
✅ Rider Benefits
Look for plans that offer critical illness, accidental death, and waiver of premium riders.
💸 Term Plan With Return of Premium vs Investment Plans
Many people confuse ROP term plans with investment plans. Here’s a quick breakdown:
ROP Term Plan: Pure insurance with premium refund.
Investment Plans (ULIP, Endowment): Mix of insurance and market/investment exposure.
If your primary goal is life insurance with survival payout, ROP is safer and simpler.
📋 How to Apply for a Term Plan With Return of Premium
Applying in 2025 is easier than ever:
Compare Online: Use platforms like Policybazaar or insurer websites.
Enter Basic Info: Age, income, coverage amount, term.
Choose Plan: Pick a premium return term insurance plan based on your needs.
Complete Medicals: Some plans may need medical checks.
Pay Premium: Pay monthly, quarterly, or yearly.
That’s it! You’ll get an e-policy instantly in most cases.
🙋♂️ FAQs – Answering Your Common Questions
1. What is the difference between a term plan and a term plan with return of premium?
A regular term plan offers only death benefits. A term plan with return of premium provides both death benefits and a refund of premiums if you survive the policy term.
2. Are premiums for ROP plans tax-deductible?
Yes. Premiums are eligible for deduction under Section 80C, and the maturity amount is exempt under Section 10(10D).
3. Which is the best term insurance with return of premium in 2025?
Top picks include LIC Jeevan Kiran, HDFC Life Click 2 Protect, and Max Life Smart Secure Plus. Choose based on your budget and needs.
4. Can I surrender my ROP term plan early?
Yes, most ROP plans offer a surrender value, especially after a minimum lock-in period (usually 2-3 years).
5. Is it better to go for a pure term plan or ROP?
If affordability is your main concern, go for a pure term plan. But if you want your money back at maturity, an ROP plan is a better fit.
6. Can I get a term insurance with premium return if I have health issues?
Yes, but the premium may be higher, and medical underwriting might be required. Some insurers also offer long-term insurance with premium refund for high-risk individuals with riders.
7. Do ROP term plans provide coverage against critical illness?
Yes, but it depends on the insurer. You can add critical illness riders to get coverage beyond death benefits.
🧠 Final Thoughts: Should You Choose a Term Plan With Return of Premium?
A term plan with return of premium gives you peace of mind—whether you live or not, your money works for you. It’s ideal for those who:
Want financial protection and a maturity payout
Prefer insurance with money-back guarantee
Value disciplined savings without investment risk
It might cost a little more than a basic plan, but the returns (both financial and emotional) make it worth considering.
✅ Summary: Quick Checklist Before You Buy
✔️ Choose a trusted insurer
✔️ Compare plans and premiums
✔️ Understand all riders and benefits
✔️ Verify tax benefits and payout options
✔️ Ensure the sum assured matches your family’s future needs
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