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Term life insurance is only valid for a specific period of time, and once the timeline is over, you lose coverage, and your premiums are gone. Fortunately, it is possible to purchase a specific type of term life insurance coverage that won’t leave you empty-handed when your policy expires. With return of premium (ROP) life insurance, you’ll pay a flat rate for the duration of your policy and get all your money back at the end of the term.
The best return of premium life insurance is offered from reputable providers with high financial strength ratings and overall positive reviews. These companies offer policies with varying terms and policy limits as well as guaranteed death benefits and convertible policies.
The 5 Best Return of Premium Life Insurance of 2021
- Best for High Coverage Limits: AAA Life Insurance Company
- Best Personalized Experience: Cincinnati Life Insurance
- Best for Longer Terms: Assurity Life Insurance
- Best for Building Cash Value to Borrow Against: State Farm
- Best Convertible Coverage: Indiana Farm Bureau Insurance
Best for High Coverage Limits : AAA Life Insurance Company
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AAA offers a return of premium life insurance rider in amounts up to $5 million+, making it a good option for families with considerable income and assets.
Term coverage with return of premium from $100,000 to $5 million+
Terms between 15 and 30 years
AAA membership is not required
Speak with an agent to get a quote
No additional riders available with this coverage
Health screening will be required
We chose AAA Life Insurance Company as best for high coverage limits because they offer return of premium life insurance coverage in amounts up to $5 million+. Founded in 1902, AAA started its journey by fighting for better roads. This led to the creation of AAA’s auto clubs, which are well known for offering award-winning roadside assistance options. These days, AAA offers a variety of products to its customers, ranging from auto insurance to life insurance and homeowners insurance.
When it comes to their return of premium life insurance coverage, AAA Life lets you choose from 15, 20, or 30-year terms. No additional riders are available with this type of coverage, but you can purchase up to $5 million+ in term life insurance with the promise of having your premiums returned.
You don’t have to be an AAA member to apply for life insurance with this provider. Note that, once you apply for coverage, receiving it is not instant as there is an underwriting and screening process.
Unfortunately, you will have to answer health questions and take a health exam in order to qualify. AAA Life is also lacking when it comes to allowing consumers to get a free quote online. You’ll have to speak with an agent to apply and find out how much you’ll pay for coverage.
Read the full review: AAA Life Insurance Company
Best Personalized Experience : Cincinnati Life Insurance
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Cincinnati Life Insurance stands out with the best personalized experience because you work with a licensed agent in your area who can provide you with a personalized, tailored experience without a pressured sales pitch.
Return of premium policies are offered for 20-, 25-, or 30-year terms
Personalized agent experience.
You cannot get a quote without speaking with an agent and providing your personal information
Return of premium is only guaranteed for the base premium of your policy
Medical exam required
Cincinnati Insurance Companies date back to 1950, and they have grown their influence and financial strength since then. For example, Cincinnati Life Insurance boasts an A+ rating for financial strength from AM Best. Don't let the regional name fool you; Cincinnati Life is available in many places with headquarters in Fairfield, Ohio.
While Cincinnati Life Insurance isn’t as well known as some of the providers on our list, this provider can be a good option if you prefer to buy insurance from an agent instead of an online portal. With the help of an agent, you can determine the exact amount of return of premium coverage you need with the ideal term, and you can receive assistance as you walk through the application process. The company prides itself on ensuring each new customer has a positive experience with a no-pressure sales approach.
Term life insurance coverage is available from Cincinnati Life Insurance in 10-, 15-, 20-, 25-, or 30-year terms. However, you’ll need to speak with an agent to discuss your options and apply for a quote. Cincinnati Life doesn’t offer any meaningful information on their policies on their website, which makes it difficult for you to shop around.
Best for Longer Terms : Assurity Life Insurance
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Assurity Life Insurance is ideal if you want a longer term of 20 or 30 years with return of premium protection to insure yourself in your most vulnerable years.
Get premium payments back if you outlive your policy
Agent provides you with a personalized quote
You can convert your policy to a permanent policy
Shorter term coverage isn’t available if you want return of premium
Not available in New York
Because Assurity Life Insurance only offers return of premium coverage for policies that last for 20 or 30 years, this provider is our top pick for ROP coverage for longer terms. Fortunately, you won’t be pursuing coverage from a fly-by-night insurance provider. With a long history that dates back to 1890, Assurity Life Insurance has stood the test of time. This company also has strong ratings for financial strength, including an A- rating from AM Best.
Term policies from Assurity Life Insurance offer the option to convert your policy to permanent life insurance, which is a major plus. Their return of premium policies also come with a level premium and a guaranteed death benefit your family can count on.
Regarding potential downsides, Assurity Life Insurance only offers two choices of terms for its ROP policies. Also, know that you’ll need to answer health questions and pass a medical exam to qualify.
Best for Building Cash Value to Borrow Against : State Farm
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State Farm lets you purchase term life insurance coverage with a return of premium benefit, and you get the chance to build cash value you can borrow against in a pinch.
Term coverage for 20 or 30 years with return of premium
Convert policy to permanent life insurance up to age 75
Apply for a free quote online
Customize your policy with additional riders
Qualify for a multi-policy discount
Only two terms for return of premium coverage
Not available in Massachusetts or Wisconsin
State Farm's return of premium life insurance policies build cash value you can borrow against, which is a feature frequently attributed to whole life insurance policies. This provider has also been around since 1922, and they have a strong history of financial strength and integrity.
While originally started as an auto insurance provider, State Farm now offers more than 100 products and services, including homeowners insurance, banking products, investments, and more. The fact that State Farm boasts an A++ rating for financial strength from AM best should also give you peace of mind and provides the kind of stability that makes State Farm best for building cash value you can borrow against.
State Farm is one of the few providers that lets consumers apply for a free quote online. Their return of premium policies are available for 20 years or 30 years, and you can customize them to meet your needs with additional riders for children or waiver of premium in the event of a disability.
According to State Farm, a 25-year-old woman in Illinois could buy a term policy worth $250,000 with the return of premium coverage starting at $49.59 per month, whereas a 30-year policy in the same amount would start at $51.77 per month. State Farm isn’t licensed to sell life insurance in Massachusetts or Wisconsin, so you’ll need to look for another provider if you live in one of these states.
Read the full review: State Farm Life Insurance
Best Convertible Coverage : Indiana Farm Bureau Insurance
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If you wish, Indiana Farm Bureau policies let you convert to a paid-up permanent life insurance policy or a partially paid-up permanent policy. While many providers let you convert term coverage to permanent, Indiana Farm Bureau’s partially paid-up conversion option is unique because you can receive part of your premiums back in cash.
Convert your policy to permanent insurance
Choose from a 20-year or 30-year term
You cannot apply for a free quote online
Offices are not available nationwide
Medical exam may be required
Indiana Farm Bureau policies come with some unique options when it comes to converting your coverage. When you buy a return of premium policy and your term ends, you can receive all the premiums you paid back on a tax-free basis. However, you can also select to use your premiums for a paid-up permanent life insurance policy, or you can get part of your premiums back and use the rest to pay for permanent coverage. All of this makes the company our choice for the best convertible coverage.
Indiana Farm Bureau Insurance has been around since 1934, so they have a long company history. In addition to life insurance, they also offer homeowners insurance, auto insurance, umbrella policies, and coverage for your business. The company has an A rating from AM Best for financial stability.
In terms of their return of premium life insurance policies, you have the option to buy this term coverage for 20 or 30 years. As a potential downside, you should note that you have to work with an agent to get a quote for a return of premium insurance policy, and a medical exam may be required.
Final Verdict
All of the providers on our list offer the best returns of premium life insurance. They are all reputable companies with strong financial standings and industry experience. Some companies provide online quotes, and others offer high coverage limits. Some offer personalized experiences with knowledgeable agents.
Overall, we recommend checking out AAA. You don’t need to be a member to get a policy, and they offer competitive rates on term coverage with return of premiums up to $5 million.
Compare the Best Return of Premium Life Insurance
| Company | AM Best Rating | Coverage Capacity | Issue Ages | Premiums | Policies Offered |
| AAA | A | $5 million | Up to 85 | Vary | Term, whole, universal, and accident |
| Cincinnati Life Insurance | A+ | Contact agent | Contact agent | Contact agent | Term, whole, and universal |
| Assurity Life Insurance | A- | Contact agent | Contact agent | Contact agent | Term, whole, and universal |
| StateFarm | A++ | Contact agent | Up to 75 | $49.59+/month | Term, whole, and universal |
| Indiana Farm Bureau Insurance | A | Contact agent | Contact agent | Contact agent | Term, whole, and final expense |
Guide to Choosing the Best Return of Premium Life Insurance
What Is Return of Premium Life Insurance?
Return of premium life insurance is a type of term life insurance that offers to return all premiums paid if the insured outlives the length of the policy. Term policies typically come in 5- to 30-year term lengths, and some offer a refund of premiums paid after the term is completed.
Key Return of Premium Life Insurance Definitions
- Face value. The face value on a return of premium policy is the amount paid out to beneficiaries upon the death of the insured individual.
- Death benefit. Similar to the face value, the death benefit is the total amount of coverage available on the life insurance policy and will be paid out to beneficiaries if the insured dies while the policy is in force.
- Term life insurance. Term life insurance is a type of temporary life insurance coverage that offers a death benefit for a specific length of time.
- Beneficiary. A beneficiary is the legal recipient of a life insurance policy death benefit when the insured passes away.
- Premium. A life insurance policy premium is the amount paid for coverage. This may be a single, monthly, quarterly, semi-annual, or annual payment. For return of premium policies, the total premium paid is returned after the policy expires.
- Riders. A rider is an optional life insurance policy enhancement that offers additional coverage or benefits to the insured or their spouse/dependents.
Who Should Get Return of Premium Life Insurance?
Return of premium life insurance is ideal for individuals who desire temporary life insurance coverage with the assurance that they will receive their money back for premiums paid should they outlive the policy.
How to Calculate the Cost of Return of Premium Life Insurance
The cost of a return of premium policy is typically quoted in monthly or annual installments, for the entire life of the policy. The total cost of the policy will be the premiums paid for the length of the term, but if you expect to outlive the term policy, you will receive all premiums paid back.
Return of premium insurance may cost more than traditional term life insurance, so it's best to compare rates between policies to understand the total cost difference.
How To Choose the Best Return of Premium Life Insurance
To find the best return of premium policy that fits your needs, follow these steps:
- Figure out how much coverage you need. Most experts recommend at least 10 times your annual salary in life insurance coverage. Return of premium policies typically offer up to $1 million in coverage (sometimes more).
- Figure out how long you need coverage for. Return of premium term policies typically come in 10-to-30-year term lengths. Assess for how long you need coverage before applying for a policy. Typically, term coverage helps cover the loss of income if you have kids living at home, an outstanding mortgage, or other large financial obligations.
- Figure out the cost difference between return of premium and standard term policies. To find the best policy, we recommend comparing top life insurance companies and getting multiple quotes to find the best price. It is also helpful to compare return of premium term policies with standard term policies to see the price difference.
- Speak with a professional. We recommend speaking with a professional life insurance agent to understand the best options for life insurance coverage to fit your needs.
Frequently Asked Questions
What Is Return of Premium Life Insurance?
Return of premium life insurance works almost exactly how the name implies. You can buy this coverage in various terms, usually 10 to 30 years, and you’ll pay a flat premium during that time.
But your money doesn’t disappear once your policy duration ends. When your term life insurance policy ends, all the premiums you put into the policy will be paid back to you in a lump sum.
This transforms return of premium life insurance riders into a forced savings product of sorts. You’ll pay higher premiums for this type of coverage than you would for traditional term life insurance, but you’ll have the benefit of getting your premiums back when your policy ends. Also, be aware that some return of premium policies build cash value you may be able to borrow against.
How Does Return of Premium Life Insurance Work?
Return of premium life insurance is a type of term life insurance that offers a refund of premiums paid. It is a standard term policy, with a death benefit and term length (typically 10 to 30-years). Premiums paid into the policy will be refunded to the insured if they outlive the policy. These policies typically cost more than a standard term policy.
Can I Get My Money Back If I Cancel Return of Premium Insurance?
Yes. All life insurance policies are required to offer a free-look period for new policies. Clients can cancel at any time during this free-look period, for any reason, and receive a full refund of premiums paid. The free-look period varies by state (and company) but is a minimum of 10 to 30 days.
How Much Does Return of Premium Life Insurance Cost?
A return of premium life insurance policy is much more expensive than traditional term life insurance coverage. However, you get your premiums back when your term expires, so that doesn’t mean this coverage is a poor value.
That may seem like a big increase, but keep in mind how your policy will play out over 20 years. With traditional term coverage, you would still pay thousands in life insurance premiums over the course of the term, but you wouldn’t have anything to show for it after 20 years.
On the other hand, with a return of premium policy, you would pay more, but you would get all of your money back if you outlive your policy.
Is Return of Premium Life Insurance Worth It?
Return of premium life insurance may be worth it if you want the peace of mind of life insurance coverage, but expect to outlive the policy you purchase. But we recommend comparing the cost of a return of premium policy with a standard term policy, and rates may be much higher.
What Should I Do When Buying Insurance?
If you've decided that return of premium life insurance is a good fit for you, the next step is to locate an insurance carrier and policy that suits your individual needs. Finding the right insurance plan will likely require a bit of research on your part.
In addition to keeping an eye out for any potential discounts, you'll need to compare the offerings of different insurance companies to ensure you're getting the best policy for your money. When determining how much money your dependents will need, it's crucial to consider factors like your total debt, how large a payout would be needed to be to replace your current income over a certain period of time, anticipated financial needs like children's college tuition, and if others in your family (such as an income-earning spouse) may also need to be insured.
During a recent interview with Andrew Mais, Connecticut Insurance Commissioner, he said "So, as you go to buy insurance, if you have questions, ask. We've got people who love to talk to you about insurance, which—if you're at a cocktail party—we may not be the people you want to hang out with. But if you're looking for info, you come to us because it's so much easier. We've got publications and info on our websites. This is where I think your state insurance departments are just so strong, so helpful, and can do so much for consumers."
The National Association of Insurance Commissioners offers a comprehensive map of each state's insurance department contact information.
Most insurance companies require new applicants to chose either "male" or "female" when applying for insurance, and don't always offer an option for those who identify as nonbinary or transgendered. While being nonbinary doesn't disqualify you from getting insurance, you should be aware that most insurance companies haven't updated their underwriting processes to reflect an awareness of gender issues.
Methodology
Few insurance companies advertise return of premium life insurance coverage, yet we were able to find quality companies that offer ROP insurance with flexible terms. We compared providers in terms of their financial strength and the options available to customize your policy. We also gave preference to return of premium life insurance that is convertible to permanent life insurance or builds cash value. Finally, we looked for life insurance providers who make it easy to get a free quote online.