Return of Premium Rider for Life Insurance

Return of premium rider life insurance provides a refund for all the monthly payments you've made when you outlive your term life insurance policy. Adding a return of premium rider for life insurance can increase your monthly rate by 130%. However, life insurance rates vary for each person. Shop around and compare multiple companies to secure an affordable return of premium rider with life insurance.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Jul 28, 2021

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The Rundown

  • Return of premium riders are usually attached to term life insurance
  • Return of premium rider life insurance refunds the monthly payments you’ve made during a term life insurance policy
  • The cost of life insurance doubles per year when you add a return of premium rider

Did you know a return of premium rider for life insurance refunds all of the monthly payments you make to a term life insurance policy?

Term life insurance with a return of premium rider can feel like a whole life insurance policy but with fewer benefits. But how does a return of premium rider work?

Our guide has everything you need to know about life insurance quotes with a return of premium rider and life insurance companies offering a return of premium rider on life insurance.

Once you decide if return of premium rider life insurance is right for you, enter your ZIP code above to start comparing life insurance quotes from local companies for free.

How much is a return of premium rider?

Return of premium rider life insurance rates are more than double what you would usually pay for life insurance for the year.

The average increase on life insurance rates with a return of premium rider is 130%.

Let’s say you have a term life insurance policy that’s $400 per year. When you add a return of premium rider, your life insurance rates could be as high as $920 per year.

Here’s an example of what your life insurance rates would look like per month.

  • Life Insurance Rates without Return of Premium Rider – $33/month
  • Life Insurance Rates with Return of Premium Rider – $77/month

Several factors determine your life insurance rates. The most significant factors include age, health, policy term, death benefits, and policy type.

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What is a return of premium rider?

A return of premium rider provides a refund for all the payments you’ve made on your term life insurance policy. Return of premium riders are usually made for term life insurance policies, but some life insurance companies with return of premium riders will offer it with guaranteed universal life insurance policies.

How does a return of premium rider work? Unlike permanent life insurance policies which are supposed to last your entire life, when you outlive your term life insurance policy, a return of premium allows you to recover all the premiums you paid over the years.

What are the pros and cons of return of premium rider life insurance?

Although return of premium life insurance sounds great, there are some drawbacks to this type of life insurance. Let’s explore some advantages and disadvantages of life insurance with a return of premium rider:

Return of Premium Rider Pros:

  • Recover money you’ve paid for term life insurance
  • Available at the best companies
  • Most people outlive their term life insurance policies

Return of Premium Rider Cons:

  • It doesn’t grow like permanent life insurance policies
  • More expensive than some permanent life insurance policies

Return of premium riders have more pros than cons, but you should still take a moment to review return of premium riders closely and shop around for the right type of return of premium rider life insurance coverage for you.

Can I get a return of premium rider for guaranteed universal life insurance?

It depends on the company. Some guaranteed universal life insurance companies offer a return of premium rider. With a return of premium rider for universal life, you’ll receive the actual cash value from your policy as well as the value of all premiums you’ve paid into your universal life insurance policy.

However, if you decide to cancel your guaranteed universal life insurance policy before the term ends, you won’t recover the money you paid for life insurance premiums.

What companies offer return of premium life insurance?

In addition to policy type, your return of premium rider life insurance quotes will vary by company. If you’re not sure where to look, start comparing quotes from the best insurance companies in the United States.

Check out this list of life insurance companies that provide return of premium riders:

  • AAA Life Insurance Company
  • Assurity Life Insurance
  • Cincinnati Life Insurance
  • Indiana Farm Bureau Insurance
  • State Farm Life Insurance

Do you want to see more companies offering return of premium riders for life insurance? Check out our free insurance company reviews to learn more about the life insurance companies in your area.

Return of Premium Rider Life Insurance: What’s the bottom line?

Ultimately, return of premium riders are small investments compared to permanent life insurance. However, return of premium life insurance is more expensive than some whole life insurance policies.

Before you buy return of premium rider life insurance, use our free online quote tool below to compare multiple life insurance quotes from companies in your local area.

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