LIC Term Insurance with Return of Premium

Quick Overview

There is no Life Insurance Corporation (LIC) term Insurance with return of premium (ROP) option. Although the company provides a wide range of products, such as endowment plans, ULIPs, and pension schemes that cater to millions of Indians, currently it does not have any ROP variant.

ROP is not a good choice if you are looking for pure protection plans, as premiums are much higher (generally 80-100%) than regular term plans. Besides, returns don’t grow, and rider premiums aren’t refunded, causing overall value loss over time.

Wondering what happens to your premiums if you outlive your LIC term policy? Term plans should be treated as a pure protection tool; if you outlive the policy term, consider your work done. Consider the lost premiums as a replacement for your peace of mind.

At Ditto, we guide thousands of customers to make the correct decision while purchasing a term plan. This guide walks you through LIC plans with ROP options and whether it is worth considering.

LIC Term Insurance With Return of Premium Plans

In general, ROP term plans work by refunding all the base premiums paid if the policyholder survives the entire policy term. However, LIC’s term plans are pure protection plans, meaning they pay a death benefit if the insured passes away during the policy term, but no maturity benefit if the policyholder survives.

LIC does not offer any ROP term plans. It used to offer Jeevan Kiran (Plan No. 870) with the ROP option, but was later withdrawn in January 2025. The insurer actively offers pure term plans like LIC’s Digi Term, Digi Credit Life, New Tech Term, and Bima Kavach. These plans come with level, increasing, or decreasing term cover to choose from.

Key Features of LIC Term Insurance With Return of Premium

Survival Benefit

Unlike pure term plans, you get a full death cover during the policy term. If you survive the term, the insurer refunds the total base premiums paid.

Higher Premiums

ROP plans cost significantly more than regular term insurance with the same coverage, as premiums are returned at maturity.

No Investment Returns

The refunded amount is only the premiums paid. There is no interest, bonus, or market-linked growth on the maturity payout.

Surrender Value

After buying a term insurance with ROP option, if you discontinue payments of premium or surrender the plan, you may get a surrender value depending on the plan.

LIC Term Insurance With Return of Premium vs Regular Term Insurance

Since there is no LIC term insurance plan with return of premium, you may look into other insurers that offer ROP options. Private Insurers like HDFC Life and Axis Max offer ROP options with a term plan at higher annual premiums.

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What Is Covered and Not Covered under LIC ROP Term Insurance?

Inclusions	Exclusions
Natural death (e.g., cardiac arrest)	Suicide within the first policy year
Death due to terminal or critical illness	Death due to participation in undisclosed hazardous or extreme sports
Death due to natural disasters or pandemic-related	Death due to intoxication or substance abuse
Accidental death	Death while committing a criminal act or homicide

Note: As per IRDAI rules, if the policyholder dies by suicide within the first year of buying or reviving the policy, the insurer will reject the claim and refund around 80% of the total premiums. Such inclusions and exclusions vary from plan to plan.

Why Choose Ditto for Term Insurance?

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LIC Term Insurance with Return of Premium

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Ditto’s Take on ROP Options

At Ditto, we do not recommend opting for ROP options while purchasing a term policy, as it does serve the purpose of pure protection for your family. It is more of a savings or investment product. Besides, if you outlive the policy, only the base premiums are returned, not the additional rider premiums or any underwriting fees.

From a financial perspective, we suggest that you should buy a pure term plan and invest the surplus funds in a mutual fund or similar financial instruments yielding better returns. Unlike ROP options, where the real value of your premiums may diminish over time(due to inflation), a dedicated SIP with the surplus funds meets your long-term financial goals.

If you are looking for a term plan from insurers with personal customization and affordable riders, we recommend comprehensive plans, which align with your long-term goals. Explore more about how our experts evaluate term plans through Ditto’s cut.

Note: Ditto is not a partner of LIC. All information in this article is based on details available on LIC’s official website and other publicly available sources.

Frequently Asked Questions

Do ROP options refund the entire premium amount?

No, term plans with ROP options return only the base premiums paid if you survive the policy term. This refund does not include any taxes, rider premiums, or any interest, so the real value of the returned amount is lower due to inflation.

Term insurance with return of premium LIC, is it better than private insurers?

LIC does not offer any ROP plans. Private insurers often offer ROP variants, but at very high premium costs, making them uneconomical for most people.

If I already own Jeevan Kiran, do I still get the Return of Premium benefit?

Yes. If you already hold the LIC Jeevan Kiran plan, your benefits remain unchanged. Withdrawal of a plan only stops new sales; existing policyholders continue to receive the return-of-premium benefit as per the original policy terms.

Are ROP term plans worth the higher premium?

In most cases, no. ROP plans cost significantly more than pure term plans, but the returned premium is just your own money coming back, without accounting for inflation or lost investment returns.

What happens if I exit or surrender an ROP term plan early?

Most ROP term plans offer limited surrender value in the initial years. If you discontinue the policy before maturity, you typically lose most of the premiums paid, which defeats the core promise of premium return.

Last updated on: 25 Jan, 2026