While such plans can have many benefits, policyholders must understand that they require a high premium payment.
Term insurance has traditionally been known to provide financial security to family members of policyholders in case of any unfortunate event. While traditional term plans do not offer any benefits if the policyholder survives, there some insurers who are now offering ‘Double Refund of Premium (2XROP) Term Life Plans’ that offer the best of both worlds — comprehensive term life coverage and a guaranteed payout of twice the premiums paid (excluding taxes). However, to avail this feature, a policyholder will have a particular window of early exit.
According to Varun Agarwal, Head of Term Insurance at Policybazaar, it’s a smart way to safeguard your loved ones while ensuring you get rewarded for staying covered.
Why Choose Plans With This Feature?
1. 100% Protection + 200% Returns
Traditional term plans provide only a death benefit, but with a 2x refund of premium term plan, you not only get life coverage throughout the policy term but also receive the option to exit your policy at a particular age (generally 10 years before the policy term) and get double the total premiums paid.
2. Flexible Premium Payment Options
According to Agarwal, this feature is available with limited premium payment terms (such as 5, 7, 10, or 15 years), allowing policyholders to finish payments early while keeping coverage intact for the entire duration.
3. No Additional Premiums for Maturity Benefits
These term plans ensure a substantial payout at no additional cost beyond your standard premiums. You get the best of both worlds—affordable life insurance with a guaranteed financial return.
4. Ideal for Retirement & Legacy Planning
“Since you receive twice the total premiums paid somewhere near your retirement age, these plans serve as an excellent retirement corpus or an inheritance fund for your loved ones. If life coverage is no longer needed after a certain age, you can exit and enjoy the benefits of this corpus.” Agarwal said
Who Should Consider Term Plans with this feature?
- Young professionals – Lock in lower premiums early and maximize returns.
- Family providers – Secure your loved ones and create a financial cushion.
- Self-employed individuals – Get insurance protection with assured returns.
- Retirement planners – Build a tax-free retirement corpus
Cons Of Such Term Plans
While such plans can have many benefits, policyholders must understand that they require a high premium payment. Also, the return is double the amount of premium paid and not twice your sum assured. Moreover, a policyholder will have to exit the policy in a particular window to avail of this benefit.