Overview

Term insurance with maturity benefits, commonly known as Term Return of Premium (TROP) plans, provides a dual advantage: life cover during the policy term and a refund of premiums if the policyholder survives till the end of the term. Unlike standard term plans that only provide a death benefit, TROP plans return the base premiums paid, making them appealing to buyers who want some payout on survival.

For example, in HDFC Life Click2Protect Supreme Plus, a 25-year-old male non-smoker buying a ₹1 crore cover till age 60 pays around ₹11,645 per year for the pure term variant, while the ROP variant costs around ₹26,400 per year, which is 125% higher for the same life cover.

At Ditto, we generally do not recommend TROP plans because the higher premium only pays for the refund feature and does not increase your life cover or generate meaningful returns.

The term insurance market in India has seen growing awareness around Return of Premium (ROP) variants, especially among first-time buyers who like the idea of getting their premiums back at maturity. Many people searching for term life insurance with a maturity benefit assume it offers both protection and wealth creation. However, these plans are significantly more expensive than pure term insurance and are generally not recommended from a financial planning perspective, since the higher premiums do not translate into better returns or higher life cover.

This guide explains how term insurance with maturity benefits works and, more importantly, whether TROP is actually the right choice for you.

Not sure whether to go with a pure term plan or TROP? Book a free call now or chat with us on WhatsApp.

What Is Term Insurance with Maturity Benefit (TROP)?

Term insurance with a maturity benefit, also called Term Insurance with Return of Premium (TROP), is a type of term plan that refunds your base premiums if you survive the full policy term.

For example, if you pay ₹25,000 annually for 30 years and complete the policy term without any claim, the insurer returns ₹7.5 lakh at maturity.

Unlike regular term insurance, where there is no payout on survival, TROP adds a refund feature. However, this refund is limited to the premiums you paid. There are no bonuses, investment returns, or profit-sharing benefits.

    • What Gets Refunded: 100% of base premiums paid, excluding GST, rider premiums, and additional charges.
    • What Does Not Get Refunded: Taxes, rider costs, and any extra charges. If a death claim is paid during the term, no maturity benefit is applicable.
    • What To Watch Out For: If the policy lapses, is surrendered early, or becomes paid-up, the refund may be significantly reduced or not be payable at all.

How Does Return of Premium (ROP) Work in Term Plans?

Let’s use a real example. A 30-year-old non-smoker buying a ₹1 crore cover till age 70 gets the following:

Over 40 years, the ROP plan returns:

    • ₹30,306 × 40 = ₹12,12,240

There is no interest, bonus, or investment growth. It is simply your base premiums returned.

Now look at the cost difference:

    • Total extra paid over 40 years = ₹6,62,120
    • Extra premium paid for ROP = ₹16,553/year

If this ₹16,553 yearly difference is invested separately instead, the outcome changes significantly:

Investment ReturnEstimated Value After 40 Years
6%₹25.6 lakh
8%₹42.8 lakh
12%₹1.27 crore

In comparison, the ROP plan returns only ₹12.12 lakh. More importantly, unlike TROP, where your money is locked in for the entire policy term, investing via mutual funds offers liquidity, flexibility, and potential for compounding, making it a more efficient way to build wealth while staying protected.

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Insurers typically structure Term Insurance with Return of Premium (TROP/ROP) in three ways, depending on how the benefit is integrated into the product:

1. As a Variant Within a Flagship Plan: In this approach, ROP is offered as one of the built-in variants under a core term insurance plan. Buyers can choose the ROP version at the time of purchase, alongside other variants with different benefit structures.

Example: Bajaj Life eTouch II (Life Shield ROP variant)

2. As an Add-On or Optional Feature: Here, the ROP benefit is available within the same plan, allowing you to include it while customizing your base policy. This structure offers more flexibility in combining ROP with other features or riders.

Example: HDFC Life Click 2 Protect Supreme Plus (ROP option within the base plan)

3. As a Separate Standalone Plan: If the insurer’s flagship term plan does not include an ROP option, they may offer it as a completely separate product designed specifically with a return-of-premium benefit.

Example: ICICI Prudential iProtect Smart and its ROP counterpart, ICICI Prudential iProtect Smart Return of Premium

There is no single best term insurance with a maturity benefit for everyone. The right choice depends on your age, premium budget, policy term, eligibility, riders, and whether the refund feature is worth the extra cost. In most cases, Ditto still recommends comparing these ROP variants against pure term plans before making a decision.

1) HDFC Life Click 2 Protect Supreme Plus (With ROP Option)

Key Features

    • ROP add-on returns 100% of base premiums if no claims are made till maturity, with a maximum possible policy tenure of 40 years
    • Accidental Death Add-on
    • Disability & Critical Illness Premium Waiver
    • Income benefit on accidental disability
    • Inflation-linked cover increase
    • Critical illness cover (60 illnesses)
    • Life stage increase option
    • Terminal illness cover (up to ₹2 crore)

Drawbacks

    • Premiums are higher compared to other ROP-enabled plans

2) Axis Max Life Smart Term Plan Plus (ROP Variant)

Key Features

    • Returns 100% of base premium paid if no claims are made till maturity (including extra underwriting premiums or modal loadings, if any)
    • Accidental Death & Disability Benefit Option
    • Critical illness cover (up to 64 illnesses)
    • Regular (Level) or Smart Cover (1.5x coverage for the first 15 years)
    • Waiver of premium on disability or critical illness
    • Terminal illness benefit (up to ₹1 crore)
    • Zero-cost exit option and women-specific benefits (Lifeline Plus and discounts)

Drawbacks

    • ROP premiums are high, often close to twice that of regular term plans
    • Critical illness rider has term limits and is not available with all pay modes
    • No top-up feature to increase coverage

3) Bajaj Life eTouch II (Life Shield ROP Variant)

Key Features

    • Returns 100% of the base premium paid if no claims are made till maturity
    • Accidental death benefit
    • Life stage benefit (increased coverage after marriage or childbirth)
    • Critical illness cover (60 illnesses)
    • Waiver of premium on accidental total and permanent disability
    • Terminal illness cover and zero-cost option

Drawbacks

    • Does not offer an increasing cover variant
    • Brand recall is lower compared to larger insurers like HDFC or ICICI

4) ICICI Prudential iProtect Smart Return of Premium

Key Features

    • Flexible policy and premium payment terms, including Limited Pay (5, 7, 10, 12, or 15 years) and Regular Pay, with policy terms ranging from 20 to 40 years
    • Multiple death benefit payout options: lump sum, income over 5 years, or a combination
    • Optional riders such as Accidental Death Benefit and Accidental Total & Permanent Disability

Drawbacks

    • Does not offer an inflation-linked cover increase
    • Slightly higher complaint volume compared to some peers

5) Aditya Birla Sun Life Super Term Plan (ROP Variant)

Key Features

    • Returns 100% of base premiums if no claims are made till maturity
    • Accelerated critical illness benefit (42 illnesses)
    • Waiver of premium on accidental total and permanent disability
    • Life stage flexibility and terminal illness payout
    • Cover continuance (premium deferment up to 12 months)
    • Early exit value (available only in non-ROP variants)

Drawbacks

    • Limited rider flexibility with the ROP option
    • Some features are not available when ROP is selected, reducing customization

Note: These are ROP variants of some of the best overall term insurance plans in India. While the base plans are among our top recommendations for pure protection, the ROP versions come at a significantly higher cost. If your priority is maximum coverage at the lowest cost, you should also review pure term plans before deciding.

Return of Premium Variants or Base Plans: Which Is Better?

PlanPremium without ROPPremium with ROP
HDFC Life Click2Protect Supreme Plus₹11,645₹26,400 (125% higher)
Axis Max Life Smart Term Plan Plus₹9,613₹20,496 (108% higher)
Bajaj Life eTouch II₹8,909₹16,451 (84% higher)
ICICI Prudential iProtect Smart (vs ROP variant)₹8,288₹20,288 (107% higher)
Aditya Birla Sun Life Super Term Plan₹9,600₹18,200 (82% higher)

Note: The sample premiums above are for a 25-year-old male, non-smoker, opting for a ₹1 crore cover till age 60, without first-year discounts.

Key Insights: ROP variants cost 80–125% more than pure term plans, even though the life cover remains the same. For example, with Bajaj Life eTouch II, the ROP variant costs about ₹7,500 extra every year. Over 35 years, this difference can grow to roughly ₹10–11 lakh if invested separately at 7% returns. In comparison, the ROP plan simply refunds the premiums paid, without any growth.

Why Choose Ditto for Term Insurance? 

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Term Insurance with Maturity Benefit
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Ditto’s Take

At Ditto, we generally do not recommend Return of Premium (TROP) plans. While the idea of getting your premiums back at maturity may sound attractive, these plans are usually far more expensive than pure term plans for the same life cover and do not generate any real returns.

For most buyers, it makes more financial sense to choose a pure term plan and use the premium savings to either increase the life cover or invest separately. While a term insurance plan with maturity benefit may feel emotionally reassuring, the math usually works against it because the refund does not include meaningful growth.

If the idea of recovering premiums is important to you, a zero-cost (smart exit) term plan can be a better alternative. It offers the flexibility to exit at a later stage and recover premiums without paying the significantly higher cost associated with TROP plans.

Before choosing any plan, compare options carefully and ensure that your life cover is adequate for your family’s needs. If you are evaluating term insurance options, you can also explore our detailed guide on the best term insurance plans in India.

Frequently Asked Questions

What is term insurance with maturity benefits?

Term insurance with a maturity benefit, also known as Return of Premium (TROP), refunds 100% of your base premiums if you survive the full policy term. It is not an investment product. There are no bonuses, no interest, and no fund value. If you pay ₹25,000 per year for 30 years, you receive ₹7.5 lakh at maturity. GST, rider premiums, and loading charges are excluded. These plans are classified as non-participating and non-linked under IRDAI guidelines, which means the payout is fixed, does not depend on market performance, and the product does not participate in the insurer’s profits.

Is TROP worth buying, or should I choose a pure term plan?

For most buyers, a pure term plan along with investing the premium savings separately (for example, via a SIP in equity mutual funds) works better financially. Plans like HDFC Life Click 2 Protect Supreme Plus cost significantly less without the Return of Premium option, and the savings can be invested to build a larger corpus over time. TROP plans, on the other hand, simply refund your premiums at maturity. They are non-participating, which means they do not share in the insurer’s profits and offer no additional returns beyond the premium paid. That said, TROP may still make sense if the refund feature helps you stay disciplined and insured. The key condition is that the higher premium should not reduce your life cover. Adequate coverage should always be the priority.

How does Return of Premium work in a term plan?

Return of Premium means the insurer refunds your base premiums at maturity if you survive the policy term. There is no interest or bonus added. For example, if you pay ₹12,000 per year for 30 years, you receive ₹3,60,000 at maturity. GST, rider costs, and additional charges are excluded. If the policy lapses, is surrendered early, or becomes paid-up, the refund may be reduced or lost. If a death claim occurs during the term, no maturity benefit is paid. The feature is purely a premium refund mechanism.

What is the difference between TROP and endowment plans?

TROP is a pure protection plan that only refunds premiums at maturity. Endowment plans combine insurance with savings and offer bonuses or guaranteed additions over time. For example, insurers like Life Insurance Corporation of India offer endowment plans with declared bonuses, which increase the final payout. TROP does not provide any such growth. Premiums for endowment plans are typically much higher than term plans of any kind, but these have significantly lower life cover. If a policy mentions bonuses or fund value, it is not a term plan with a maturity benefit.

What is the difference between TROP and zero-cost term plans?

TROP refunds premiums only at the end of the full policy term, and exiting early usually means losing that benefit. Zero-cost (smart/early exit) term plans work differently. They allow you to exit after a predefined period, typically 25–30 years, and recover the premiums paid up to that point. Zero-cost features are usually built in and offered at no extra cost, making them closer in pricing to pure term plans. In contrast, TROP plans are significantly more expensive because you are paying up front for the maturity refund. You also cannot combine both features in the same plan, and in most cases, zero-cost plans are a more cost-effective and flexible alternative to TROP.

Does term insurance with maturity benefit offer tax benefits?

Yes, TROP plans offer tax benefits under the Income Tax Act, 1961. Premiums qualify for deductions up to ₹1.5 Lakh under Section 80C if you follow the old tax regime. The maturity payout is generally tax-free under Section 10(10D), provided premiums do not exceed 10% of the sum assured. Death benefits are also tax-exempt for the nominee. However, under the new tax regime introduced in Budget 2023, Section 80C deductions are not available. It is important to evaluate your tax regime before considering the tax advantages.

What are the main disadvantages of a TROP plan?

The biggest drawback is cost. TROP plans can cost two to three times more than pure term plans for the same cover. For instance, HDFC Life Click 2 Protect Supreme Plus shows a large premium gap between ROP and non-ROP options. The refund also does not account for inflation, which reduces its real value over time. Investing the premium difference separately often leads to better outcomes. This makes TROP less efficient from a purely financial perspective.

Can I get my premiums back if I surrender a TROP policy early?

In most cases, you do not receive the full refund if you exit early. As per the IRDAI surrender value rules, insurers pay only a partial surrender value, which is usually much lower than the total premiums paid. Some plans may offer a paid-up option, but the final maturity benefit and life cover are reduced. Policies like Bajaj Life eTouch II and Axis Max Life Smart Term Plan Plus clearly define these conditions. If early exit flexibility is important, TROP may not be ideal.

How much more expensive is TROP compared to a pure term plan?

TROP plans are significantly more expensive than pure term plans, typically costing 60–100% more on average, and sometimes even higher. For example, HDFC Life Click 2 Protect Supreme Plus shows a wide premium gap between ROP and standard variants for the same ₹1 crore cover. Over a long policy term, this difference can add up to several lakhs. While you do receive your premiums back at maturity, the opportunity cost of not investing that difference is substantial, making TROP a costly trade-off for a guaranteed but non-growing refund.

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