Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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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.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Feb 8, 2021

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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 provider and cannot guarantee quotes from any single provider.

Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from top life insurance companies please enter your ZIP code on this page 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.

The Facts of Life

  • The return of premium riders can be a short term investment for those who can’t afford whole life insurance.
  • Return of premium life insurance can cost as little as $13 per month.
  • Higher coverage limits may cost more, but you’ll have more on your death benefit.

If you outlive your term life insurance policy, you won’t receive the death benefit coverage, but a return of premium life insurance rider can compensate you for years worth of payments.

Return of premium life insurance is a benefit you can add to a term life insurance policy – however, it will likely increase your life insurance rates.

You can compare multiple return of premium life insurance quotes by entering your ZIP code in the free comparison tool above.

What is return of premium life insurance?

Return of premium life insurance is a term life insurance policy that gives all your monthly premiums back in a lump-sum, tax-free payment. However, this is only if outlive your term life insurance policy.

How does return of premium life insurance work?

Before you buy return of premium life insurance, you have to decide if you want to add a return of premium rider to your term life policy. A rider is a benefit that you can add to your life insurance policy.

The return of premium rider is one of many riders you can add to your life insurance policy. Once you have it, your premiums will be returned to you after the term life policy ends.

If you cancel your return of premium life insurance policy before the term ends, you could forfeit your benefits and lose your death benefits along with lump-sum payment.

How much does return of premium life insurance cost?

Your return of premium life insurance rates are determined by age, gender, death benefits, and the length of your term life policy. We researched the average term life insurance rates and compared them to return of premium life insurance.

Comparing 20-Year Basic Term Life and Return of Premium Life Insurance Rates by Age, Gender, and Coverage Value
Age and Gender$250,000 Policy Average Monthly Basic Term Life Insurance Rates$250,000 Policy Average Monthly Return of Premium Life Insurance Rates$500,000 Policy Average Monthly Basic Term Life Insurance Rates$500,000 Policy Average Monthly Return of Premium Life Insurance Rates
20-Year-Old Male$18$23$29$38
20-Year-Old Female$15$20$22$29
25-Year-Old Male$17$22$28$36
25-Year-Old Female$15$20$22$29
30-Year-Old Male$18$23$29$38
30-Year-Old Female$15$20$23$30
35-Year-Old Male$19$25$31$40
35-Year-Old Female$17$22$26$34
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Males usually have higher term life and return of premium life insurance rates. Higher death benefits also demand more per month. The higher the coverage value, the bigger the return.

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Is return of premium life insurance worth it?

Term life insurance and return of premium life insurance are usually cheaper than policies like whole life insurance and universal life insurance. However, there are some drawbacks to return of premium life insurance. Let’s go over a few pros and cons.

Advantages

You can secure cheap return of premium life insurance and get something back that’s designed to dissolve after it’s over. If you pass away before the end of the policy, the beneficiary will receive the death benefit.

When you outlive the policy, you’ll get back all the premiums you’ve paid in a tax-free payment.

Disadvantages

Return of premium life insurance policies are 30 percent higher than basic term life insurance. They also don’t accumulate interest. If you allow your life insurance to lapse, you’ll lose your return of premium benefits.

Unfortunately, return of premium life insurance isn’t available from all life insurance companies. Therefore, you’ll have to shop around.

Since return of premium life insurance is term life insurance, it doesn’t carry the benefits of retirement savings like permanent life insurance.

Top Five Return of Premium Life Insurance Companies

The list of life insurance companies with return of premium life insurance may be limited, but we managed to find the top five in the United States. Let’s examine what these companies provide under the return of premium life insurance rider.

  • AAA – This company has coverage values up to $5 million, but you have to get quotes from an agent, and a health screening is required.
  • Assurity Life Insurance – Assurity has longer-term life periods (20 and 30-year), but it’s not available in New York.
  • Cincinnati Life Insurance – Cincinnati doesn’t have 10-year terms but offers a personalized experience for customers.
  • Indiana Farm Bureau Insurance – This company allows you to convert your term life policy to permanent life insurance but doesn’t let you get a free quote.
  • State Farm – State Farm allows you to customize your term life insurance with riders or change to a permanent life insurance policy.

As you shop around, you may find other life insurance companies that provide return of premium life insurance. Be sure to compare return of premium life insurance quotes before you make a final decision.

Can I get a return of premium rider for other term life policies?

Yes. The return of premium life insurance rider is designed for term life policies. Therefore, you won’t secure a return of premium rider for a permanent life insurance policy.

What about permanent life insurance policies?

Permanent life insurance policies don’t use the return of premium rider since money accumulates in an account when you pay your premium.

Did you know death benefits don’t have to be reported as taxable income? According to the Internal Revenue Service, any death benefits you receive as a beneficiary aren’t gross income, and you don’t have to report it.

However, the interest you accumulate from a permanent life insurance policy will have to be reported.

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Return of Premium Life Insurance: The Bottom Line

Some of the best life insurance companies carry return of premium life insurance, but it’s going to take some digging to find other companies that provide it. We located five of the best, but you may have better luck locating a reliable life insurance company near you.

To start searching for return of premium life insurance, enter your ZIP code in the free online quote tool below to find the most affordable life insurance rates near you.