Who can get return-of-premium life insurance?

This is especially important for those who are self-employed and do not have term life insurance through group plans, as well as other individuals who want term coverage but cannot meet certain health requirements.  If you find yourself in either of these situations, then consider getting a return premium term life insurance plan that allows you to keep the full amount you pay towards your death benefit if nothing happens within the term period.

Those with minimal cash available in their early years may find that return of premium term policies are cheaper than regular term coverage because they provide the same level of protection but don’t require any additional premium payments. For example, a 20-year old male non-smoker looking for term life insurance would pay roughly $26 per month for term coverage, whereas a return of premium term policy might cost only $9.69 per month. The other benefit is that there’s no extra money owed at the end of the term should you choose to keep your term policy instead of taking advantage of the term life premium refund upon expiration.

Can I add cash value to the policy?

Many term policies advertise that they allow for a return of term premium, but when you read the fine print you might not be able to add any extra cash to your term policy or it may be very difficult. In addition, when adding cash value it is important to consider the associated fees with each term life insurance plan. Most term policies are sold as stand-alone term products, but there are usually no associated annual premiums or maintenance fees with return premium term insurance.

Are there any downsides?

While return of premium term products tend to be less expensive in general, they may cost more for those who typically purchase term coverage but occasionally become very ill. The reason term insurance with returns of premium is more expensive under these scenarios is that term life insurance premiums are based on the term applicant’s health at their time of application, so if they become ill during the term period, they will most likely have to pay a higher term premium because of their medical condition or history.

Will this type of term policy suit my needs?

If you cannot get term coverage elsewhere for any reason, return premium term life insurance may be an option for you. It is also good for those who want term protection but do not meet the criteria to qualify for standalone term policies through group plans or other group life insurance options. Find out what you qualify for by contacting one of our expert agents!