Zero Cost Term Insurance Plans
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Himanshu is a content marketer with 2 years of experience in the life insurance sector. His motto is to make life insurance topics simple and easy to understand yet one level deeper for our readers.
Naval Goel, the founder of PolicyX is a well-recognised name in the Indian insurance and finance industry. His global overview has revolutionised the way insurance is perceived and bought by commoners in India.
Updated on Apr 08, 2025 3 min read
Zero-cost term insurance is a new kind of term insurance plan that allows policyholders to exit their policy at a particular time during the policy tenure and get all their premiums back. A zero-cost term plan promises policyholders the return of their premiums on a fixed date. In layman's terms, you can purchase term insurance at the standard market premium rates, pay the premiums for a set number of years, exit the policy at the pre-defined time, and get all the paid premiums back.
A zero-cost term insurance policy offers premium payments back after the GST deductions, which may depend on tax laws and the insurer. When opting for a zero-cost term insurance benefit, customers cannot opt for the return of the premium option. You can opt for only one of the two benefits when purchasing a plan.
Term Insurance Plans: Get Zero Cost Insurance
Let’s understand how the zero-cost term insurance plan works with an example.
Rakesh, a 30-year-old living with his wife and 2-year-old son, has taken a housing loan of Rs 50 lakhs. To ensure his family is financially stable in case of his demise, he bought a zero-cost term insurance policy with a sum assured of Rs 1 crore and a policy term of 45 years. Let’s understand how the plan works for him with a premium illustration.
| Policyholder’s Age | Sum Assured | Policy Tenure | Annual Premiums | Total Premiums Paid (till age 60) |
|---|---|---|---|---|
| 30 years | Rs 1 crore | 45 years | Rs 13,800 | Rs 4,14,000 |
| Insurance Providers | Name of Plans | Entry Age | Sum Assured | Unique Features | Check Plans |
|---|---|---|---|---|---|
| Axis Max Life Insurance | Axis Max Life Smart Secure Plus | 18 to 65 years | Rs 50,000 to 1 Crore | Return of premiums, Premium breaks, Special exit value | |
| Bajaj Allianz Life Insurance | Bajaj Allianz E-Touch | 18 to 65 years | Rs 50 Lakh to No Limit | Premium holiday option, Get your premiums back, Flexible premium pay | |
| HDFC Life Insurance | HDFC Click 2 Protect Super | 18 to 84 years | Rs 5,000 to no limit | Return of premium, Waiver of premium, Spouse cover | |
| ICICI Prudential life insurance | ICICI Prudential iProtect Smart | 18 to 65 years | N/A | Lower premiums for females, Whole life coverage, Affordable premiums | |
| Canara HSBC Life Insurance | Canara HSBC iSelect Smart 360 | 18 to 65 years | Rs 5 Lakhs to 2 Crore | 3 Plan Options, Child Care Benefits, Spouse Cover |
Zero-cost term insurance offers a range of benefits to the policyholders that are mentioned below:
Here are the reasons why you should consider purchasing a no-cost term insurance plan:
A zero-cost term insurance plan has a unique feature wherein insurance holders can exit their term insurance plan and get the return of their premiums. Zero-cost term plan also offers multiple rider options that insurance holders can select. The zero-cost term insurance policy usually has a long policy term of 35-40 years. There are various term insurance companies that are selling zero-cost term insurance such as Axis Max Life Insurance, Bajaj Life Insurance, HDFC Life Insurance, and ICICI Life Insurance.
A pure term insurance plan offers financial security to your family in your absence in exchange for certain premiums. If the policyholder dies during the policy term, their nominee will receive the chosen sum assured to live a comfortable lifestyle. The premiums are comparatively lower and not returned under any circumstances.
There are a few factors that must be considered before purchasing a zero-cost term insurance plan to realize its full potential and benefits.
It is important to understand the mechanics of a zero-cost term insurance plan and read its terms and conditions before making the purchase decision. The plan is designed to safeguard your family against any unfortunate incident and also give you the liberty to exit the policy after a certain policy tenure. As we know, everything has a cost, and nothing comes for free. That’s why it’s important to read and understand the terms and conditions of a zero-cost term insurance plan to ensure there are no hidden charges involved. However, every insurance provider has different terms and conditions that are essential to understand to plan your finances better.
Zero-cost term insurance plans may provide you with a limited coverage amount which is why it is essential to consider if the policy is offering an adequate sum assured based on your financial obligations, and liabilities such as education loans, home loans, etc.
The zero-cost term insurance plans allow you to exit the policy after a certain duration. Make sure to choose the policy term that aligns with your future financial goals and outstanding liabilities.
Zero-cost term insurance plans offer a range of benefits to the policyholders, and one such benefit is the option to choose additional riders. Riders enhance the coverage of your term insurance plan. Choose riders that best align with your financial goals.
Below are the steps you should follow to purchase a zero-cost term insurance plan
Given below is the list of documents required to purchase a zero-cost term insurance plan.
Here are the reasons for buying a zero-cost term insurance plan from PolicyX.com:
PolicyX helps you compare a wide range of plans based on their features and choose the one that best fits your requirements.
Buying term plans from PolicyX.com is a hassle-free process as it lets you compare various term plans within 30 seconds.
PolicyX is a leading insurance aggregator that is trusted and loved by customers for 11 years now due to its best services and quick claim support.
You can contact PolicyX through email or IVR number and one of their insurance experts will connect with you shortly to address all your concerns.
PolicyX stands with you even in the hardest of times and provides you with dedicated claim settlement support when required.
We have listed below some insurance providers offering zero-cost term insurance to insurance holders with various features and benefits
Zero-cost term insurance is an ideal plan for individuals who want to offer coverage to their loved ones but also require the flexibility to exit the policy in case they do not require it anymore. It is a right financial tool for salaried individuals as they can receive their premiums back and also exit the policy after fulfilling their financial goals. However, individuals must keep in mind that zero-cost term insurance plans do not allow policyholders to exit the policy whenever they want. You have to pay premiums for a particular policy period before availing the smart exit option offered by these plans.
If you are still confused about which zero-cost term plan is best, then you can contact us at PolicyX.com or call us at 1800-420-0269.
No, zero-cost term insurance plans do not allow customers to exit the policy at any given point in the policy period. You can avail special exit feature only after a certain tenure. in the policy document. Individuals can exit the policy on the basis of terms and conditions laid down by the insurance providers which varies from insurer to insurer.
Multiple insurance providers offer zero-cost term insurance plans, such as Bajaj Allianz, HDFC Life Insurance, ICICI Prudential, Axis Max Life Insurance, and more.
No, the major difference lies in the fact that in a return of premium plan, the insured individual will receive all the premiums once the policy term concludes and not before that. Whereas in a zero-cost term insurance policy, you can forego the policy after a specific policy term period depending on the policy and insurance provider selected. Thereturn of premium plan premiums is generally more expensive than zero-cost term plans wherein you don’t have to pay extra to avail of a zero-cost term insurance plan.
No, not all insurance providers have designed a zero-cost term insurance plan. However, a large number of insurance companies have started offering this particular variant of plan.
Yes, tax benefits are applicable on premiums paid towards the zero-cost term insurance plans under Section 80 (C) and Section 10 (10D) of the Income Tax Act, 1961.
Pure-term plans offer financial protection to your loved ones in case of your demise during the policy tenure with no returns of premiums.
While zero-cost term plans offer a return on premiums after a certain period, depending on the insurer and the policy.
Yes, zero-cost term insurance is good if you want less financial burden.
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