19/08/2026
Return of Premium Term Plan โ is it really worth it? ๐ค
Letโs understand what youโre actually getting.
Take a 30-year-old non-smoker looking for โน2 crore term insurance for 30 years.
With a Return of Premium term plan:
๐น Premium: around โน37,000/year
๐น Life cover: โน2 crore
๐น If you survive the full 30 years: around โน11 lakh back at maturity
So the attraction is simple:
โIf nothing happens to me, at least I get my premiums back.โ
Fair enough.
But now compare that with a normal term plan.
๐น Same โน2 crore cover
๐น Same 30-year period
๐น Premium: around โน18,000/year
That leaves around โน19,000 every year.
Instead of paying that extra amount for the Return of Premium feature, what if you invest that difference separately?
At an assumed 8% return, โน19,000 invested every year for 30 years could potentially grow to around โน23 lakh.
And if something happens after 20 years, the family still gets the โน2 crore insurance cover, while the separate investment could potentially be around โน10 lakh.
So Iโm not saying Return of Premium is bad.
If getting your premiums back is important to you, itโs an option.
But before choosing it, ask yourself:
โDo I want the insurance company to return my premium later, or would I rather keep the same insurance protection and invest the difference myself?โ
Compare the numbers. Then make your decision.
Illustrations only. 8% investment return is assumed and not guaranteed. Actual premiums, benefits and investment returns depend on the specific product and circumstances.
