What if you could protect your family now and still get your money back later - without paying extra for a Return of Premium (TROP) plan?
That’s exactly what Zero-Cost Term Insurance does.
Introduced by major insurers in 2024 and rapidly trending in 2025, this feature allows policyholders to exit their term plan early and get all paid premiums refunded, while keeping the same low premium as a normal term policy.
It’s the perfect middle ground between protection and flexibility.
This guide explains how the zero-cost option works, who can use it, and which insurers in Hyderabad, Telangana offer the best plans this year.
What Is Zero-Cost Term Insurance?
A zero-cost term plan allows you to:
- Get full life cover like a regular term policy.
- Cancel anytime after a set lock-in period (5-10 years).
- Receive 100% refund of premiums paid (excluding GST and rider costs).
Unlike a TROP, you don’t pay extra premiums - the price is nearly identical to a pure term plan.
How Zero-Cost Option Works
- Buy a standard term plan with zero-cost feature enabled.
- Pay regular premiums for a fixed period (for example, 10-15 years).
- Choose to surrender the policy mid-term (before maturity).
- Receive back all base premiums paid - policy ends.
Example: You buy ₹1 Cr cover for ₹10,000/year (40-year term).
After 20 years, if you surrender → get ₹2,00,000 refund, even if no claim is made.
Zero-Cost Vs Return Of Premium (TROP)
| Feature |
Zero-Cost Term Plan |
TROP (Return of Premium) |
| Premium |
Low (like normal term) |
30–40% higher |
| Refund |
100% refund if exited mid-term |
Refund at policy maturity |
| Flexibility |
Cancel anytime after 5–10 years |
Locked till end |
| Coverage Duration |
Full term unless exited |
Fixed till maturity |
| Rider Availability |
All riders available |
Limited riders |
| Ideal For |
Buyers wanting flexibility |
Long-term savers |
Benefits Of Zero-Cost Term Insurance
- 100% refund flexibility: exit anytime after lock-in period.
- Low premium: same pricing as pure term plans.
- No commitment anxiety: perfect for young or first-time buyers.
- Tax benefits: eligible under Sections 80C & 10(10D).
- Full coverage while active: refund only if no claim used.
Best Zero-Cost Term Plans In India (2025)
| Insurer |
Plan Name |
Key Feature |
Lock-in Period |
Refund Eligibility |
| HDFC Life |
Click 2 Protect Super |
100% refund after 25 years |
10 years |
Yes |
| ICICI Prudential |
iProtect Smart Zero Cost |
Refund after 25 years |
10 years |
Yes |
| Max Life |
Smart Secure Plus |
Zero-cost exit after 10 years |
10 years |
Yes |
| Tata AIA |
Sampoorna Raksha Supreme |
Exit between 40–60 years |
10 years |
Yes |
| SBI Life |
eShield Next |
Refund after 25 years |
10 years |
Yes |
(Based on insurer product brochures and IRDAI filings 2024–2025.)
Eligibility Criteria
| Factor |
Requirement |
| Entry Age |
18-55 years (varies by plan) |
| Policy Term |
25-40 years |
| Lock-in Period |
5-10 years |
| Minimum Premium Paid |
Usually 10 years required for refund |
| Refund Condition |
No claim made before surrender |
Local Insights For Hyderabad
- % of new buyers choosing zero-cost option: 18%.
- Avg. refund expected (20-year surrender): ₹1,25,000.
- Top insurers offering zero-cost: HDFC Life, Max Life, SBI Life.
- Avg. lock-in period selected: 10 years.
Why Zero-Cost Term Is A Game Changer
- Combines protection + refund flexibility.
- Perfect for uncertain financial goals or early retirees.
- Gives confidence to first-time buyers skeptical about “no returns.”
- Keeps your premium ultra-low - no TROP markup.
PolicyBachat Tip
Always verify refund eligibility duration before buying - each insurer has a different lock-in rule. Check the fine print before opting in.
Tax Benefits
- Section 80C: Deduction up to ₹1.5 lakh/year.
- Section 10(10D): Refund and claim payout tax-free.
- Section 80D: For CI or health riders (₹25k-₹50k).
Faqs
What is zero-cost term insurance?
A flexible term plan that refunds all premiums if surrendered mid-term.
How is it different from return-of-premium?
Zero-cost lets you exit mid-way, while TROP refunds only at maturity.
Do I have to pay higher premiums for zero-cost option?
No - premium remains similar to standard term plan.
When can I claim the refund?
After completing the lock-in (usually 5–10 years).
Can I exit anytime?
Only after the lock-in period; refund processed within 15–30 days.
Do I lose tax benefits if I exit early?
No, tax benefits already claimed remain valid.
Can NRIs buy zero-cost term plans?
Yes - available through major insurers offering NRI term coverage.
What happens if I die before lock-in ends?
Nominee gets full death benefit - refund not applicable.
Can I rejoin after surrender?
No, you must buy a new plan if you cancel mid-term.
Which insurers currently offer this feature?
HDFC Life, Max Life, Tata AIA, ICICI Prudential, and SBI Life.
Customer Reviews
- “I exited after 12 years and got full premium refund - brilliant plan!” - Rohit Iyer, Chennai
- “Best feature ever - gives flexibility without extra cost.” - Ananya Sharma, Delhi
- “Now I recommend zero-cost option to everyone.” - Vikram Desai, Mumbai
- “PolicyBachat explained zero-cost vs TROP clearly.” - Meera Nair, Kochi
- “Perfect for young professionals like me - no fear of commitment.” - Arun Menon, Bengaluru
- “Got refund in 10 days after surrender - seamless experience.” - Priya Verma, Hyderabad
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