Best term life insurance with return of premium

A return of premium life insurance policy is a type of life insurance that pays back the amount of premiums you have paid in full once the policy expires. It is a relatively new type of policy, and there are a lot of things you need to know before deciding if it is right for you. In this guide, we will discuss the pros and cons of return of premium life insurance policies and help you decide if this type of coverage is right for you.

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This Return of Premium rider for term life insurance will return all premiums paid in a lump sum if you outlive the term. If you cancel your policy early, you could get back a partial amount of the premiums paid.

How Does Return of Premium Life Insurance Work?

Return-of-premium life insurance can be purchased as a standalone policy or as a life insurance add-on to a standard term policy. You typically choose the length of your return-of-premium coverage when you purchase it, such as 20 or 30 years.

• If you die during the term, your beneficiaries are entitled to the death benefit.
• You get back the whole amount you paid in, with no interest, if you outlive the coverage. The money isn’t taxable because it’s simply a return of the payments you made.

If you have a regular term life insurance policy, you’ll get nothing back if you’re still living when the coverage expires.

Return of Premium Life Insurance Pros and Cons

Pros:

• If you die before your policy’s expiration date, the insurer refunds your premium payments.
• Because it isn’t income, the money is not taxed when it’s returned to you.
• Cheaper than universal life insurance and whole life insurance.

Cons:

• It’s significantly more expensive than traditional term life insurance.
• You generally must hold the policy for the entire term and make all payments in order to receive your cash back.

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Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

With Return of Premium (ROP) term life insurance, you can get a 100% refund of the premiums you paid if you are still alive at the end of the term.

For example, imagine that you’re buying a $1,000,000 policy with a 30-year term. Let’s say your premiums may cost $10,000 per year; your actual premiums will vary depending on your age, health and other factors.  At the end of the 30th year, the insurance company will pay the policy owner $300,000, tax free! That’ll be a pretty good addition to your retirement savings!

If you die during the term, your beneficiaries would collect the $1 million death benefit in the same way as a traditional policy. The following video gives a quick overview of how ROP policies work.

ROP life insurance costs more than a traditional term life policy. The extra cost is invested by the insurance provider to be paid back to the owner of the policy when it expires. Is the possibility of a full refund at the end of the term worth the extra expense? Many consumers think so.

Consider this: a traditional 30-year term policy with a $1,000,000 face amount (similar to the example above) might cost $6,000 per year. That equals $180,000 over the course of the term.  If you live beyond that 30 years, you can purchase another policy at much higher rate or simply go forward uninsured. With a return of premium plan, you’ll pay more in premiums, but if you outlive the term, you’ll get it all back. That can help pay for your new policy, if you decide to buy one. Or you can use it however you like.

Return of premium life insurance policies are available in 15, 20 and 30 year terms.

20 Year Return of Premium Life Insurance Rates (Male)

Sample yearly Rates for 20 year Return of Premium Term insurance.

* prices are based on a preferred plus male (Aug 2017)

20 Year Return of Premium Life Insurance Rates (Female)

Sample yearly Rates for 20 year Return of Premium Term insurance.

* prices are based on a preferred plus female (Aug 2017)

30 Year Return of Premium Life Insurance Rates (Male)

Sample yearly Rates for 30 year Return of Premium Term insurance.

* prices are based on a preferred plus male (Aug 2017)

30 Year Return of Premium Life Insurance Rates (Female)

Sample yearly Rates for 30 year Return of Premium Term insurance.

* prices are based on a preferred plus female (Aug 2017)

Is return of premium term life the right choice for you?

Every situation is different. AccuQuote can help you assess your needs and provide you with unbiased advice to help you make an educated decision. We’ve been helping people like you find the best value in life insurance since 1986. We make the buying process as easy and quick as possible for our customers. For many of our customers, we become lifelong advisors.

Give AccuQuote a call today at 800-442-9899 and let us help you find the best insurance rates for your situation. We’ll make it as quick and easy as possible. You can also get a free quote by clicking the Get Started button below.

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