Can You Cash Out a 20-Year Term Life Insurance Policy?

Shawn Plummer

CEO, The Annuity Expert

Standard 20-Year Term Life Insurance Policy

  • Cash-out option: No
  • Explanation: A standard term life insurance policy does not accumulate cash value. Therefore, you cannot cash it out. It only provides a death benefit if the insured person dies within the term.

Return of Premium 20-Year Term Life Insurance Policy

  • Cash-out option: Yes
  • Explanation: A return of premium (ROP) term life policy allows you to get back the premiums paid if you outlive the policy term. This feature effectively acts as a cash-out option, but only after the policy term ends.

Comparison of Cash-Out Options

Policy TypeCash-Out OptionExplanation
Standard 20-Year Term Life InsuranceNoNo cash value accumulation.
Return of Premium 20-Year Term PolicyYesPremiums returned at end of term.


The ability to cash out a 20-year term life insurance policy depends on the type of policy. Standard term policies do not offer a cash-out option as they don’t accumulate cash value. However, a return of premium policy does allow for cashing out at the end of the term by returning the premiums paid. This distinction is crucial when choosing a policy that aligns with your financial goals.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

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

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