No Spam, No GimmicksGenuine, honest, and hassle-free
Personalised Insurance AdviceAdvice that fits your life & budget
24*7 Claim AssistanceHassle-free support whenever you need
Google Ratings (2500+)
★★★★★
11+ Years
IRDAI Approved
5M+
Quotes Generated
100K+
Happy Customers
PolicyX is one of India's leading digital insurance platform
Published: 10 Dec 2024
Updated: 21 Jul 2026
3 min read
Expert Verified
IRDAI Licensed
What is Zero Cost Term Insurance?
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 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.
Video reviews
Walkthroughs from the PolicyX team — pros, cons, and who should buy.
Term Insurance Plans: Get Zero Cost Insurance
Zero Cost Term Insurance. This insurance offers you both financial security and the opportunity to get your premiums back. Zero Cost Term Insurance promises to return your premiums on a fixed date.
How Does Zero Cost Term Insurance Work?
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 ₹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 ₹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
₹1 crore
45 years
₹13,800
₹4,14,000
Top Zero Cost Term Insurance Plans in India in 2025
Zero-cost term insurance offers a range of benefits to policyholders that are mentioned below:
Exit Before Full Term
As compared to return of premium plans, where an individual has to pay premiums till the end of the policy term, a zero-cost plan allows users to exit the policy when they feel they have fulfilled their responsibilities and have no liabilities left.
Best for Salaried Individuals
People working in the public sector can be assured of the security of their family members as the public sector provides for pension and medical care in case of retirement or death. However, if you are a salaried individual in the private sector, it is best to invest in a zero-cost term insurance policy as you can get your premiums back after a particular policy term.
Better Financial Planning
When opting for a zero-cost term benefit, customers have the liberty to choose to avail of their smart exit option when liabilities such as loans and children’s education are fulfilled, leading to better financial planning for a family.
Additional Riders to Choose From
A policyholder has the option to choose additional riders with their zero-term insurance plan to enhance the coverage. There are various riders available, including accidental death benefit rider, terminal illness rider, waiver of premium rider, critical illness rider, etc.
Flexible Policy Tenure
A zero-cost term insurance provides flexibility to choose the policy tenure of your choice. You can choose coverage for 10, 20, 30 years, or even more.
Tax Benefit
A zero-cost term insurance policy offers tax benefits to the insurance holders under Section 80C of the Income Tax Act, 1961. Moreover, the death benefit paid to the nominee is also eligible for tax benefits under Section 10(10D) of the Income Tax Act, 1961.
Why Should You Consider Purchasing a No-Cost Term Insurance Plan?
Here are the reasons why you should consider purchasing a no-cost term insurance plan:
Affordable Premiums
The premiums for zero-cost term insurance plans are comparatively less than a term insurance with return of premium plan (TROP). The premium rates of zero-cost term insurance policies do not create financial pressure on your budget.
Peace of Mind
Usually, customers avoid purchasing a term insurance plan because of the common notion that a pure protection plan will not provide any monetary benefit and all the premiums paid to the insurance provider are a waste if the insured individual survives its policy tenure. However, with a zero-cost term insurance plan, the customer has the power to exit the policy after continuing the policy for a given number of years as policy tenure.
Return of Premiums
With zero-cost term plans, you can get a return on the premiums paid, excluding the GST, after a certain period, depending on the insurer chosen by you. It does not create a financial burden.
Factors to Consider Before Purchasing Zero Cost Term Insurance
There are a few factors that must be considered before purchasing a zero-cost term insurance plan to realize its full potential and benefits.
Understand the Terms and Conditions
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.
Sum Assured
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.
Consider Policy Term
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.
Optional Riders
Zero-cost term insurance plans offer a range of benefits to 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.
How to Purchase Zero Cost Term Insurance From PolicyX.com
Below are the steps you should follow to purchase a zero-cost term insurance plan:
Visit PolicyX.com. Click on 'Term Insurance.'
Choose your age and gender from the top right corner of the page.
Click on 'View Plans' and select your city and annual income. Then, enter your name and mobile number.
Click on 'Get Free Quotes.' Enter your date of birth, educational qualification, and smoking habits.
Choose a zero-cost term insurance plan that best aligns with your needs.
Pay the premiums for the plan, and you will shortly get the payment receipt on your email address and mobile number.
Why Buy a Zero-Cost Term Insurance Plan From PolicyX.com?
Here are the reasons for buying a zero-cost term insurance plan from PolicyX.com:
Compare and Choose the Best Plan
PolicyX helps you compare a wide range of plans based on their features and choose the one that best fits your requirements.
Hassle-Free Purchase Process
Buying term plans from PolicyX.com is a hassle-free process as it lets you compare various term plans within 30 seconds.
Customer's Choice
PolicyX is a leading insurance aggregator that is trusted and loved by customers for 11 years now, known for its excellent services and quick claim support.
Good Customer Service
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.
Claim Settlement Support
PolicyX stands with you even in the hardest of times and provides you with dedicated claim settlement support when required.
● Free Expert Advice
Talk to India's Top Insurance Advisor
Get personalised guidance from IRDAI-certified experts — zero cost, zero spam.
Our advisors help 1M+ Indians choose the right plan every year.
Compare Term Insurance Companies
Pick any two insurers to see a detailed side-by-side comparison.
VS
Other Term Insurance Companies
Compare Zero-Cost Term Insurance term plans with other top insurers in India.
The most-asked questions about Zero-Cost Term Insurance, answered.
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 of the special exit feature only after a certain amount of years mentioned during the purchase of the policy. Individuals can exit the policy on the basis of terms and conditions laid down by the insurance providers which varies from insurer to insurer.
There are multiple insurance providers that offer zero-cost term insurance plans, such as Bajaj Allianz, HDFC Life Insurance, ICICI Prudential, 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. Return of premium plan premiums is generally more expensive than zero-cost term plans wherein you don’t have to pay extra in order 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 the Income Tax Act.
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.
ChatGPT
Claude
Perplexity
