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Term vs ROP vs Permanent Life
The domain of insurance industry in India is vast and comes with a lot of coverage options. Various insurance providers offer varied plans with multiple benefits that are aimed at covering the different needs and requirements of prospective clients. When it comes to the broad classification of various insurance plans, there are three general categories of the life insurance schemes. These are pure term insurance plans, plans that come with return of premium option (i.e. ROP plans) and whole life insurance plans. These three plans are different in their formats and offer different types of coverage benefits.
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Return of Premium (ROP) Option^
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Individual Death Claim Settlement Ratio of 99.50%##
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Pure Term Insurance Vs Return of Premium Vs Permanent Life Insurance
Table of Content
What Should You Know About the Three Major Life Insurance Plan Types?
Following are the important pointers that will enable you to have a clear idea about the main features and differences between these three types of plans:
- A pure term insurance plan is the one that offers the coverage for a set and pre-decided number of years that can range from anywhere between 10 years to 30 years. It is a plan that entitles the policy holder's nominee(s) to receive the main plan benefit i.e. the sum assured in the event of the policy holder's demise during the policy term. There are no maturity proceeds however, which means that the policy holder is not entitled to receive any benefit if she/he survives the plan term. A return of premium plan, on the other hand comes with the clause that enables the policy holder to receive the premiums paid by her/him towards the policy, once the term of the policy has matured. The premiums in such plans are higher those for a pure term insurance plan. This feature comes in addition to the standard death benefit offered by the insurance provider. A pure life insurance plan is the one that offers the benefit of receiving the sum assured in the event of the policy holder's demise during the term of the plan (which is for a lifetime). Hence, as the name implies, a whole life insurance plan offers complete insurance coverage to a person for an entire lifetime.
- The next point of difference between these three types of plans is the cash value that they offer. A pure term insurance plan offers no monetary cash value and is a simple insurance plan that offers only the death benefit to the policy holder. A return of premium plan does entitle the policy holder to maturity proceeds but does not have any component for liquid cash. A whole life insurance plan, however, has a monetary deposit component and offers the benefit of cash-deposit on the paid premiums.
- The major benefit of a pure term insurance plan is that it is the most economical form of insurance available. A return of premium plan, on the other hand is costlier than a pure term insurance. However, the accrued benefit after policy maturity is the benefit that it offers. In case of whole life insurance plan, the advantage is the stability and the fixed rate of premiums added with the coverage for a lifetime.
HDFC Life offers various term insurance plans that are meant for your financial coverage and at safeguarding the future of your loved ones. For details, click on the mentioned link: https://www.hdfclife.com/term-insurance-plans.
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99.68% Claim Settlement Ratio
For FY 2024-2025
~5 Cr. Number Of Lives Insured
For FY 2024-2025
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99.68% Claim Settlement Ratio
For FY 2024-2025
~5 Cr. Number Of Lives Insured
For FY 2024-2025
Francis Rodrigues
Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.
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HDFC Life
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HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER
We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.
^ Available under Life & Life Plus plan options
#Provided we have received all the relevant and required documents and no further investigation is required. Claim settlement process would be completed within stipulated timelines once the claim request is approved
##Individual claim settlement ratio by number of policies as per audited annual statistics for FY 23-24
***Online Premium for Life Option for HDFC Life Click 2 Protect Supreme(UIN:101N183V01), Male Life Assured, Non-Smoker, salaried, 20 years of age, Policy term of 25 years, Regular pay, Monthly frequency, inclusive of 15% online discount (applicable only for 1st year premium) & exclusive of taxes and levies as applicable. (Monthly Premium of 573/30=19).
**If a customer is a Salaried individual and has opted for a cover of INR 2 Cr with Limited pay, then the total discounts applicable shall be: 10% +7% = 17% discount on the first year premiums.
@As per integrated annual report FY24-25, available on www.hdfclife.com. As of May 2025
~Tax benefits of ₹ 54,600 (₹ 46,800 u/s 80C & ₹ 7,800 u/s 80D) is calculated at highest tax slab rate of 30% on life insurance premium u/s 80C of ₹ 1,50,000 and health premium (Critical illness rider) u/s 80D of ₹ 25,000. Tax benefits are subject to conditions under section 80C, 80D, 10(10D) as per Income Tax Act, 1961. Please consult your tax advisor for more information.
