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What is TROP (Term Plan with Return Of Premium)? What Are Its Benefits?

TROP is currently one of the most popular types of life insurance plans in India? But what is this TROP plan? Read this post to know what it is, how it works and what are its top benefits.

To ensure that every individual can select a life insurance policy that perfectly meets their requirements, top insurers in India now offer many different types of life plans. Currently, one of the most popular of them is TROP. These plans combine the benefits of a term plan along with the returns generating ability of plans like whole life insurance plans.

So, what is a TROP? Let us have a detailed look.

What is TROP Insurance?

TROP plans are Term plans with Return of Premium option. It is a type of term insurance plan but has one significant difference as compared to standard term plans. In standard term insurance, the policyholder does not receive anything in case he/she survives the policy tenure.

But in TROP, the insurer returns the premiums that the policyholder has paid over the years if he/she survives the policy tenure. TROP insurance is ideal for people looking for an affordable life insurance policy, which helps them receive something in return at the time of maturity.


Let us assume that you are purchasing a TROP insurance policy with a life cover of Rs 1 crore and an annual premium of Rs 30,000. The policy tenure is 20 years. So, in case of your demise within the policy tenure of 20 years, your nominee will receive Rs 1 crore death benefit.

But if you survive the tenure, you will receive Rs 6,00,000 (total premium that you have paid for the policy over 20 years).

Benefits of purchasing TROP

1. Return of premium

Needless to say, the biggest advantage of purchasing a term plan with a money-back guarantee is that you receive the entire premiums paid for the policy if you survive the policy tenure. The feature is not available in standard term plans.

2. Highly affordable

While TROP plans are generally more expensive as compared to standard term plans, they are cheaper than other types of life insurance plans like whole life insurance, endowment plans and Unit Linked Insurance Plans (ULIPs). This makes it an excellent choice for someone who has just started their career and could not afford expensive life insurance premiums.

3. Optional riders

You also have the option to extend the coverage of your TROP policy by purchasing optional riders or add-ons. With the help of add-ons, you can get coverage for things that are generally not covered in TROP plans. But the additional premium paid for such riders will not be returned to the policyholder on maturity.

4. Tax benefit

TROP is also a type of life insurance plan which makes it eligible for tax deductions. Under Section 80C of the IT Act, premiums of up to Rs 1.5 lakh paid towards a life insurance policy in a financial year are eligible for tax deductions.

Is TROP right for you?

Term plan with return of premium is ideal for any individual wanting to receive something in return from their life insurance policy on maturity. With TROP, you receive the entire premium paid for the policy, which technically makes the policy free of cost.

You can consult a top insurer to know more about TROP and understand whether or not it suits your insurance needs.

Main Source - Icicibank