Best Return of Premium Life Insurance Companies
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Leslie Kasperowicz
Farmers CSR for 4 Years
Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insur...
Farmers CSR for 4 Years
UPDATED: Feb 24, 2024
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Return of premium life insurance or (ROP) for short, is one of several different types of available life insurance options.
Most return of premium policies are term life insurance policies with an attached policy rider known as the return of premium rider.
When the return of premium rider is added to the term life insurance coverage, it provides the owner with a full return of all premium payments paid for the life insurance coverage.
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What’s the Difference Between Return of Premium and Regular Term Life Insurance?
As mentioned earlier, return of premium is a policy rider attached to a term life insurance policy.
When the return of premium rider is added to a term life insurance policy, it guarantees that 100% of all premium payments paid into the life insurance coverage will be refunded at the end of the policy contract.
A regular term life insurance policy does not offer this. Coverage either expires or in most cases can continue but at a much higher rate.
With regular term life insurance, there are several available contract lengths ranging from 10 years up to 30 years.
Return of premium policies are often limited to contract lengths of either 20 or 30 years.
When considering a return of premium term life insurance policy, it should be noted that the cost is often double the amount of what a regular term life contract would be.
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Is Return of Premium Offered on Other Types of Life Insurance?
Yes, it sure is!
For a long time, the return of premium rider was only available on term life insurance policies.
However, the great thing about life insurance is that it is constantly changing and newer features are always being added.
One of these new features is the addition of the return of premium option being added to a few guaranteed universal life insurance policies.
Since guaranteed universal life insurance is permanent insurance coverage, you may be thinking why would you need it to have a return of premium rider?
One of the main reasons is due to changing life insurance needs. It’s not uncommon for life insurance to be purchased early in life and then not needed later in life.
As life insurance needs are often greater when younger and lesser when older, having the option to get all your money back on a permanent plan can be extremely beneficial if coverage is no longer needed.
Read more: Universal Life Insurance with Return of Premium
Best Return of Premium Life Insurance Companies
- AIG
- ANICO
- ASSURITY
- CINCINNATI LIFE
- MUTUAL OF OMAHA (Term)
- MUTUAL OF OMAHA (GUL)
- PRUDENTIAL
AIG
POLICY NAME: AG Secure Lifetime GUL III
TYPE OF POLICY: Guaranteed Universal Life Insurance
MAXIMUM COVERAGE LENGTH: Age 121
HEALTH CLASSIFICATIONS: Preferred & Standard Classes
MINIMUM COVERAGE AMOUNT: $100,000
MAXIMUM COVERAGE AMOUNT: $10,000,000+
ISSUE AGES: (Ages 18-80)
OPTIONAL POLICY RIDERS: Accidental Death Benefit, Children’s Insurance Benefit Rider, Spouse / Other Insured Term Rider, Terminal Illness Rider, Waiver of Premium Rider, Accelerated Access Solution Rider, Lifestyle Income Solution Rider
AIG offers a return of premium option called the Enhanced Surrender Value Rider. This rider is automatically included free of charge on their permanent universal life insurance coverage called AG Secure Lifetime GUL III.
The Enhanced Surrender Value option works by giving the policy owner a one-time option to surrender their life insurance coverage at specific policy anniversary years.
In order to receive a return on premiums paid, the policy owner must surrender the life insurance coverage within the first 60 days of either the 20th policy anniversary year or the 25th policy anniversary year.
- Return of premium if surrendered at year 20 is up to 50% of premiums paid
- Return of premium if surrendered at year 25 is up to 100% of premiums paid
Learn more about the other policy options in our complete AIG life insurance review.
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ANICO
POLICY NAME: Signature Guaranteed UL
TYPE OF POLICY: Guaranteed Universal Life Insurance
MAXIMUM COVERAGE LENGTH: Age 121
HEALTH CLASSIFICATIONS: Preferred & Standard Classes
MINIMUM COVERAGE AMOUNT: $25,000
MAXIMUM COVERAGE AMOUNT: $10,000,000+
ISSUE AGES: (Ages 18-80)
OPTIONAL POLICY RIDERS: Children’s Term Insurance Rider, Signature Term Rider, Disability Waiver of Premium Rider, Guaranteed Insurance Option Rider, Guaranteed Increase Option Rider, Paid-Up Additions Rider
ANICO is our second company to offer a built-in return of premium option on their Signature Guaranteed Universal Life Insurance coverage.
Similar to AIG, ANICO gives the policy owner not two, but three options to surrender their life insurance for return of premium payments with their Guaranteed Cash-Out Rider.
In order to activate the rider, the policy owner must surrender the life insurance coverage within the first 60 days of either the 15th, 20th, or 25th policy anniversary date.
- Return of premium if surrendered at year 15 is up to 50% of premiums paid
- Return of premium if surrendered at year 20 is up to 100% of premiums paid
- Return of premium if surrendered at year 25 is up to 100% of premiums paid
One of several reasons we like ANICO’s Signature Guaranteed Universal Life Insurance is that it:
- Offers a free return of premium option
- Offers free built-in living benefit riders
- Offers a no medical exam underwriting option up to $250,000
Learn more about the other policy options in our complete ANICO life insurance review.
Assurity
POLICY NAME: LifeScape Term 350
TYPE OF POLICY: Term Life Insurance with Accelerated Underwriting
CONTRACT LENGTHS: 20 & 30 Years
HEALTH CLASSIFICATIONS: Preferred & Standard Classes
MINIMUM COVERAGE AMOUNT: $50,000
MAXIMUM COVERAGE AMOUNT: $10,000,000+
ISSUE AGES: (Ages 18-60)
- Ages 18-60 for a 20-year policy
- Ages 18-50 for a 30-year policy
OPTIONAL POLICY RIDERS: Critical Illness Benefit Rider, Disability Waiver of Premium Rider, Other Insured Rider, Monthly Disability Income Rider, Children’s Term Insurance Rider
Assurity is our first life insurance company on our list to offer a return of premium term life insurance coverage. (For more information, read our “Return of Premium Term Life Insurance Quotes“)
Assurity offers the return of premium option on either a 20 or 30-year term length.
What makes Assurity different than some of the other term life insurance companies that offer a return of premium option is the fact you can apply for it with and without an exam.
Coverage under $500,000 will fall under Assurity’s accelerated no medical exam underwriting process.
For coverage over $500,000, it will require that a medical exam.
Learn more about the other policy options in our complete Assurity life insurance review.
Cincinnati Life
POLICY NAME: Life Horizons Termsetter ROP
TYPE OF POLICY: Term Life Insurance
CONTRACT LENGTHS: 20, 25 & 30 Years
HEALTH CLASSIFICATIONS: Preferred & Standard Classes
MINIMUM COVERAGE AMOUNT: $25,000
MAXIMUM COVERAGE AMOUNT: $10,000,000+
ISSUE AGES: (Ages 18-60)
- Ages 18-60 for a 20-year policy
- Ages 18-55 for a 25-year policy
- Ages 18-50 for a 30-year policy
OPTIONAL POLICY RIDERS: Accelerated Benefit Rider, Children’s Term Life Insurance Rider, Accidental Death Benefit Rider, Disability Waiver of Premium Rider
If you’re looking for simple and affordable term life insurance with a return of premium rider Cincinnati’s Termsetter is it.
Coverage comes available in fixed premium contract lengths of 20, 25, and 30 years.
Compared to some of the other life insurance companies that offer a return of premium option, Cincinnati Life often comes up best priced.
Another feature included with all Termsetter return of premium coverage is the Accelerated Benefit Rider.
The Accelerated Benefit Rider provides an early payout of the death benefit due to a diagnosis of terminal illness or if permanent confined to a nursing home.
Learn more about the other policy options in our complete Cincinnati life insurance review.
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Mutual of Omaha (Term Life)
POLICY NAME: Term Life Express
TYPE OF POLICY: Term Life Insurance
CONTRACT LENGTHS: 20 & 30 Years
HEALTH CLASSIFICATIONS: Standard Classes
MINIMUM COVERAGE AMOUNT: $25,000
MAXIMUM COVERAGE AMOUNT: $300,000
ISSUE AGES: (Ages 18-50)
OPTIONAL POLICY RIDERS: Accidental Death Benefit Rider, Dependent Children’s Rider, Disability Income Rider, Disability Waiver of Premium Rider
If you’re looking for a no medical exam term life insurance policy with a return of premium rider, Mutual of Omaha has it.
Mutual of Omaha offers a return of premium life insurance with their Term Life Express simplified underwriting.
One downside to Term Life Express with the return of premium is that the issue age is capped at age 50, whereas Assurity is at age 60.
On the plus side, Term Life Express often comes in as the better-priced company and has several included policy riders.
These free policy riders include Accelerated Death Benefit Riders, Residential Damage Waiver of Premium Rider, Waiver of Premium for Unemployment Provision, and a Common Carrier Death benefit Provision.
Learn more about the other policy options in our complete Mutual of Omaha life insurance review.
Mutual of Omaha (GUL)
POLICY NAME: GUL
TYPE OF POLICY: Guaranteed Universal Life Insurance
MAXIMUM COVERAGE LENGTH: Age 105
HEALTH CLASSIFICATIONS: Preferred & Standard Classes
MINIMUM COVERAGE AMOUNT: $50,000
MAXIMUM COVERAGE AMOUNT: $10,000,000+
ISSUE AGES: (Ages 18-85)
OPTIONAL POLICY RIDERS: Accidental Death Benefit Rider, Dependent Children’s Rider, Association Group Disability Rider, Disability Continuation of Planned Premium Rider, Disability Waiver of Policy Charges Rider
In addition to having a return of premium term option, Mutual of Omaha has also included it on their guaranteed universal life insurance coverage.
The return of premium rider is called the Guaranteed Refund Option and it’s probably one the best return of premium rider currently available on permanent life insurance coverage.
The reason we say this is because of the multiple years you’re given to surrender your life insurance coverage for a full 100% return of premium.
The first surrender period comes at policy anniversary year 15. At that time you are given the opportunity to surrender your coverage for up to 50% of all premiums paid.
Where Mutual of Omaha sets themselves different from the competition is that they give you the opportunity to also surrender your coverage during policy years 20, 21, 22, 23, 24, and 25 for up to 100% of all premium payments.
But similar to the other companies, you must surrender coverage within the first 60 days of the policy year to get your money back.
In addition to a nice return of premium feature on a permanent plan, the life insurance coverage includes several free riders such as the Accelerated Death Benefit for Terminal and Critical Illness.
This rider pays out an early portion of the death benefit if diagnosed with a qualifying terminal or chronic illness.
Learn more about the other policy options in our complete Mutual of Omaha life insurance review.
Prudential
NO LONGER AVAILABLE!
Prudential has discontinued all new sales of its PruLife Return of Premium as of 11/2/2019. This leaves Assurity, Cincinnati Life, and Mutual of Omaha as the only available companies with a return of premium option on a term life insurance coverage.
POLICY NAME: PruLife Return of Premium Term
TYPE OF POLICY: Term Life Insurance
CONTRACT LENGTHS: 15, 20 & 30 Years
HEALTH CLASSIFICATIONS: Preferred & Standard Classes
MINIMUM COVERAGE AMOUNT: $100,000
MAXIMUM COVERAGE AMOUNT: $10,000,000+
ISSUE AGES: (Ages 18-65)
- Ages 18-65 for a 15-year policy
- Ages 18-60 for a 20-year policy
- Ages 18-50 for a 30-year policy
OPTIONAL POLICY RIDERS: None
Prudential is the final company on our list of the best return of premium life insurance companies.
Prudential offers a fairly straightforward return of premium term life insurance coverage.
One thing that does set Prudential apart from the competition is that they are the only company to offer a 15-year return of premium option.
One negative to Prudential’s ROP life insurance is that they have no optional riders to add to your coverage.
However, a nice feature that comes free with life insurance is the Living Needs Benefit Rider.
This rider pays out an early portion of the death benefit if either permanent confined to a nursing home, are terminally ill, or require a vital organ transplant.
Learn more about the other policy options in our complete Prudential life insurance review.
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Most Asked Questions about Return of Premium Life Insurance
The following are some of the most popular questions asked about return of premium life insurance. If you have a question that is not listed below, please reach out to us as we will get you an answer.
Will I get my money back if I cancel my ROP policy early?
If you decide you no longer need the life insurance coverage, most companies will return a portion of the premiums paid into the coverage.
The return will not likely be the total amount invested unless you have completed the entire term contract.
The amount of the refund if coverage is canceled early is generally stated within the illustration or the actual policy.
Is a Return of Premium Life Insurance Policy a Bad Investment?
This question is as heavily debated, as the question “should I buy term or whole life insurance?”.
There really is no right answer, as it depends on the individual’s goals and objectives that are applying.
Return of premium does cost much more than a regular term policy. In most cases, the premium can be double or more than the cost of regular term insurance.
If you were to invest the cost difference between a regular term policy and an ROP policy then sure you’re probably going to see a better return on investing the money.
The problem with this theory though is that most people are not looking to invest money.
They are looking to purchase life insurance coverage and like the fact that they can get 100% of their money back when the life insurance coverage is over.
What are the Pros and Cons of Return of Premium Life Insurance?
PROS
- Guaranteed to get 100% of premiums returned when the contract expires
- Acts like a forced savings account which can be great later in life
- Money received is tax-free
- A good coverage option for both families and businesses
CONS
- More expensive than regular term insurance
- Not available in lower term lengths such as 10-year contracts
- Limited companies to choose from
- Canceling coverage early will not provide a return on all premiums paid
Should you Purchase a Return of Premium Life Insurance Policy?
Return of premium life insurance, especially the term insurance, is becoming extinct.
More and more life insurance companies are dropping it from their product line because it’s not profitable to them.
If you have a little extra cash to spend on your life insurance coverage and like the fact of knowing you will get all your money returned to you at the end of the life insurance coverage, then yes consider life insurance with return of premiums.
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