Is Return of Premium Life Insurance Worth It?

Shawn Plummer

CEO, The Annuity Expert

Is Return of Premium Worth It?

A return of premium rider refunds the premiums paid on a term life insurance policy if the policyholder does not die before the agreed-upon period has ended. Return of premium life insurance is another name for this type of coverage.

How Return of Premium Life Insurance Work

Term life insurance is a form of coverage that you purchase for a fixed length of time, typically ten to forty years. If you die during the term of your policy, the beneficiary or beneficiaries you’ve chosen in it receive the death benefit. The coverage expires if you live beyond the term of the policy. This is why term insurance is cheaper than permanent life insurance.

If you outlive the term of a return of premium insurance policy, the insurer will refund any premiums you’ve paid. However, this flexibility is more expensive.

Standard Term Life Insurance Rates vs. Return Of Premium Life Insurance Rates

The table below compares standard term life insurance with the return of premium term life insurance. The comparison is based on a 30-year old male and female applying for $1 million worth of coverage.

TermStandardReturn of Premium
20 Years (Male)$31.81$108.75
20 Years (Female)$25.80$134.85
30 Years (Male)$53.10$93.09
30 Years (Female)$44.39$125.28

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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. 

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