Return of Premium Life Insurance

Return of premium life insurance gives back all the monthly premiums you paid during the term life policy. You can pay as low as $26.50 per month for return of premium life insurance rates, but the cost varies by age and health. Compare multiple companies and shop around to find cheap return of premium life insurance quotes today.

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

Tim is a licensed life insurance agent with 23 years of experience helping people protect their families and businesses with term life insurance. He writes and creates stuff for QuickQuote and other insurance and financial websites.

Full Bio →

Written by

Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

Full Bio →

Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Jan 14, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right life insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance company and cannot guarantee quotes from any single company.

Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.

Quick Facts

  • Return of premium life insurance is a term life policy designed to give you money back after the term life ends.
  • Most life insurance companies carry return of premium riders if they don’t specifically have a return of premium life insurance policy.
  • Return of premium benefits may add more to your monthly premium.

Return of premium life insuranceor refundable life insurance – combines regular term life insurance with a return of premium feature. You choose the term: 20, 25, or 30 years.

At the end of the term, you get all of the premiums you paid back, as long as you made all payments and the policy didn’t lapse. For monthly payments of $26.50, return of premiums life insurance can benefit you.

Get your money back when you outlive your coverage with a return of premium (ROP) life insurance policy. Who offers return of premium term life insurance quotes?

Many companies offer return of premium life insurance quotes and even return of premium rider life insurance, so be sure to shop around. Ready to start saving? Take advantage of our FREE quote tool and enter your ZIP code above!

What is the catch with return of premium life insurance?

Return of premium riders will add more to your term life insurance cost. Many companies offer return of premium life insurance policies. Life insurance companies charge a higher rate for return of premium policies. They invest the difference and use the earnings to help pay back your premiums at the end of the policy term.

So, can you get your life insurance money back? Yes. Will it cost you more? Also, yes.

What type of insurance would be used for a return of premium rider? Usually, return of premium life insurance is most important for term life insurance policies since they don’t add cash value.

How does return of premium life insurance work?

It’s life insurance that gives you money back. Some companies even offer a partial premium return if you cancel your policy before the end of the term. No cash value is similar to no equity. Is a cash value life insurance policy all it’s cracked up to be?

We understand that not everybody will know what a return of premium life insurance policy is. Quizlet might have some answers but read on to learn more about return of premium life insurance.

There is some return of premium tips suggested by companies like the National Association of Insurance Commissioners.

Return of Premium Rider Available for Other Term Life Policies

Term life insurance policies work perfectly with return of premium riders. Here’s a list of term life policies that work with return of premium life insurance:

  • No Medical Exam Life Insurance
  • Mortgage Protection Life Insurance
  • Level Term Life Insurance

The purpose of the return of premium rider is to give you all the money you paid into a term life policy. It’s a great way to create savings for a cheap life insurance option.

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

How much more does return of premium life insurance cost?

It all comes down to the interest you can earn. Remember, you’re paying more than regular term life costs. In exchange, you get all of your money back. But is that return better than the return you could earn on your own? In other words, can you do better investing that extra cost each month?

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

Check out a return of premium life insurance calculator to help you decide after you compare quotes. In some cases, it makes sense. In others, not so much.

How much more will I pay for return of premium life insurance? Check out the table below that compares ROP and MassMutual term life insurance rates based on healthy 30-year-old males.

Return of Premium vs Term Life Insurance Rates
CoverageRate of Premium Life Insurance Average Monthly RatesTerm Life Insurance Average Monthly Rates
$100,000$13/month$10.45/month
$250,000$20/month$15.25/month
$500,000$34/month$23.48/month
Get Your Rates Quote Now

Compare RatesStart Now →

For a middle-aged non-smoking male insured, return of premium life insurance rates can start at $26.50 per month or $318 per year. This rate is much cheaper than other companies like State Farm’s return of premium life insurance, which is estimated at $49.50 per month for a younger and healthier female.

Curious about rates in your area? Start comparing return quotes now using our FREE quote tool above.

The Best Term Life Insurance Companies with Return of Premium Rider

Let’s examine the top five companies with return of premium riders.

  • AAA Life Insurance – AAA is known for its higher coverage limits.
  • Assurity Life Insurance – Assurity has term life policies that last longer than the average company.
  • Cincinnati Life Insurance – For a more personal customer service experience, choose Cincinnati Life insurance.
  • Indiana Farm Bureau Insurance – Indiana Farm Bureau is known for term life to permanent life conversion.
  • State Farm – State Farm is one of the best companies for building cash value, but you won’t be able to borrow against a term life policy.

A return of premium life insurance company will also carry permanent life insurance and other life insurance policies. Ask your life insurance company about other riders and benefits you can use.

Is return of premium term life insurance right for you?

Q:  Is return of premium term life insurance a good deal?

A:  Sometimes. It depends. Only time will tell.

I’m not trying to be cute with the ambiguity here. But truth be told, this is not merely a ‘yes’ or ‘no’ question. It’s slightly more involved than that. Let’s take a look at each response.

  • Sometimes – ROP term life insurance is a good option for some people, but not everyone. To say that one is better than the other in all cases is just inaccurate. Who is it suitable for? Well, that depends.
  • Depends – Three primary factors determine whether ROP term or regular term is the best fit for you.
  1. The actual rate of return the life insurance company is offering on your policy. Remember, ROP term is simply a life insurance policy that pays you back all the premiums you paid in (or a portion of the policy is terminated early) if you’re not paid a death benefit. In that sense, it’s like an investment, with the investment amount being the premium difference between ROP term and regular term. Therefore, each policy has an associated rate of return.
  2. The second factor is the likelihood that you can achieve a comparable or better rate of return by investing the premium difference on your own.
  3. The third factor, and the one that most often trips up policy owners, is the likelihood you will stick to an investment plan and invest the premium difference for the policy’s duration.
  • Only Time will Tell – Investment returns fluctuate over time. You really won’t know your investment return on the regular term/invest the difference yourself option until the end of the policy term. It’s somewhat of a leap-of-faith. But you will know upfront what the investment return on the ROP term policy will be because the premiums will be guaranteed to remain level, and the amount you will receive back will not change.

You may be surprised to see that price differential is not a primary factor in determining whether ROP term is a good deal. However, it is essential to consider whether you can afford the higher costs of return of premium. Dave Ramsey might advise some clients to find a different policy since rates are higher.

To determine return of premium rates, be sure to compare free ROP term life insurance quotes online.

Return of premium life insurance, or ROP life insurance, is very much like other types of term life insurance. It is an agreement between you and the life insurance company. You agree to pay premiums, and the carrier agrees to pay your beneficiaries a sum of money should you die.

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

Like all life insurance, ROP term life insurance is an excellent way to protect your loved ones and give them financial security. There is one main difference between return of premium life insurance and other types of life policies. With a return of premium policy, a death benefit is paid out if you pass away with all insurance plans.

If you live beyond the term, you get all of your money back dollar for dollar. So no matter what happens to you, whether a claim is made while covered or you outlive the policy money is distributed. You’ll need to decide what kind of asset you want your life insurance policy to be, according to the Insurance Information Institute.

Why should I buy return of premium life insurance?

Return of premium life insurance makes it possible to have coverage with a net cost of zero. ROP life insurance is also a safe place to put your money to receive what amounts to a modest return on your investment.

Return of Premium (ROP) term life insurance combines traditional term life insurance advantages such as affordable, guaranteed level premium periods with a return of premium feature. At the end of the level-premium period, 100 percent of the premiums paid will be returned to you!

Why shouldn’t I get a return of premium term life insurance policy?

The main reason people don’t get ROP term life insurance is that it costs more. The insurance companies that offer this product charge slightly more for it than for non-ROP term insurance.

During the level-premium period, the insurance company can invest portions of the premium for capital growth. As a result, they can return your premiums to you at the end of the level-premium period.

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

You are paying for the convenience of securing level term life insurance with an added return on your policy premiums. Return of premium life insurance policy is a nonforfeiture option, so it gives you the advantage of a level death benefit and level policy premiums just as a term policy does, but with the added feature of return on your premiums.

At the end of the level period, you select 100% of the premiums paid will be returned to you as long as you have paid your premiums throughout the period of insurance and a claim is not filed.

Most people get return of premium term life insurance policies for 20 or 30 years as the comparative return on your investment will be higher the longer you have the policy.

Return of premium senior life insurance policies may not be necessary. Adding a rider will raise your cost, so if you get a long enough term, you might not have to consider outliving your policy and needing ROP.

For more information, start now with a free return of premium term life insurance quote and compare the affordable return of premium life insurance.

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

What is the least expensive type of life insurance?

The least expensive type of life insurance is term life insurance. Yet, some people shy away from it because of its temporary nature.

Term life provides coverage for a set period of time (generally 10, 15, 20, 25, or 30 years). If you die before a traditional term life policy has expired (or if you renew your policy to extend the term), your beneficiaries get a payout. If you don’t die during the policy term, they don’t get a payout and you don’t get any of the money back that you’ve paid in premiums.

But what makes term life insurance a viable option is that it’s flexible and extremely affordable compared to permanent life insurance policies that come with high-priced premiums.

That’s precisely why I opted for a 20-year term policy to protect my family. While there are still mortgage payments to make and college education expenses to pay in the not-so-distant future, I feel better knowing my husband will have a financial cushion if tragically the unexpected happens to me.

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

So what do you do if you need cost-effective life insurance but you’re not digging the idea of making premium payments that will be all for naught if you outlast the term of your policy?

Do you get money back on term life insurance?

Return of premium term life insurance typically provides coverage for a term of 15, 20, 25 or 30 years. If you don’t die before your policy’s term ends, the insurance company pays you back in full for the amount you’ve paid on your premiums.

State Farm return of premium life insurance lays out some of their specific details on their website.

Return of premium insurance may even be available from other insurance providers that offer a variety of insurance types.

For example, AAA return of premium life insurance is a policy that many didn’t know was available. Still confused about what return of premium is? Get familiar with life insurance terms to stay on track.

Pros of ROP Term Life Insurance

With return of premium life insurance, you could have coverage with a net cost of zero dollars. If you pass away during the term of the policy, your beneficiaries receive a death benefit; if you outlive the policy’s term, you get all your money back.

ROP term life insurance combines the advantages (affordability and guaranteed level-premium periods) of traditional term life insurance with the return of premium component.

Who sells premium life insurance returns? Many companies offer return of premium life insurance now, so you should have plenty of options.

Cons of ROP Term Life Insurance

It probably comes as no surprise that ROP term life insurance will cost more than traditional term life. Life insurance companies would need to get something in return to guarantee that they’ll either be paying a death benefit or returning all premium costs dollar for dollar to you one day.

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

Also, you need to stay current with your premium payments throughout the policy term. And if you terminate your policy early, you will likely only receive a portion of the premiums you’ve paid to the insurance company. Many sources warn buyers that normal term life insurance could be an empty investment.

Is return of premium life insurance worth it?

While you will probably find it more affordable than permanent life insurance, that’s not a question I can answer here. Only you can decide what will be the best choice for your peace of mind and your loved ones’ financial well-being.

Finding the best term life insurance with return of premium could be a smart investment over time.

Return of Premium Life Insurance: The Bottom Line

Educate yourself about your options, talk with a trusted insurance professional, and ask questions so you understand the return of premium life insurance pros and cons. An ROP calculator can help you compare the cost of a traditional term life policy to an ROP policy.

Now that you know more about this money back insurance, get started comparing return of premium life insurance quotes and regular term life insurance quotes with our FREE quote tool below.


Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

QuickQuote is a BBB Accredited Business. QuickQuote Financial, Inc. BBB Business Review