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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: Mar 17, 2024
It’s all about you. We want to help you make the right life insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.
UPDATED: Mar 17, 2024
It’s all about you. We want to help you make the right life insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
Return of premium term life insurance or ROP for short is your traditional term life insurance coverage with an attached policy rider. The rider is the return of premium feature that guarantees to refund all your money back to you at the end of the life insurance contract.
Return of premium term life insurance generally comes in fixed premium term lengths of 15, 20, 25 or 30 years. In order to get 100% of the money you paid into the contract, you have to complete all years of the contract.
The benefit of the return of premium feature is the money you receive back from the life insurance company is tax-free.
Return of premium term life insurance is a very heavily debated life insurance product. You could even say that it’s debated just as much as whether you should buy term life insurance vs. whole life insurance.
The reason for so much debate is that many agents believe that the extra money you will pay for a return of premium term life insurance policy is not worth the long term investment. It is believed by many life insurance agents that investing the premium difference can yield a better return on your money.
Return of premium term life insurance is available in term lengths of 15, 20 and 30 years. Compare rates from the top life insurance companies that offer a return of premium life insurance.
Looking to compare life insurance policies? We can help. Enter your ZIP code to get free quotes from multiple insurers.
The Price Difference Between Term & Return of Premium Term Life Insurance
As mentioned above, return of premium term life insurance is a term life insurance. The only difference between the two is when you add the return of premium rider to the basic term policy.
Read more: Best Return of Premium Life Insurance Companies
However, when adding the ROP rider, it does increase the cost of what you will pay for the life insurance coverage in some cases up to 3-5 times what you would pay for a regular term life insurance policy.
EXAMPLE: Male age 35 non-smoker in excellent health seeking $500,000 of 30-year term life insurance
- Life insurance cost without ROP = $39.73 monthly
- Life insurance cost with ROP = $87.05 monthly
Monthly difference = $47.32
EXAMPLE: Female age 45 non-smoker in good health seeking $250,000 of 30-year term life insurance
Life insurance cost without ROP = $42.79 monthly
Life insurance cost with ROP = $103.29 monthly
Monthly difference = $60.50
Based off of the two examples, you can clearly see that there is a huge difference in the premium when you elect to add the return of premium rider to a term life insurance policy. With there being such a large premium difference, would a return of premium term life insurance be the right type of life insurance coverage for you?
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When Should you Consider Return of Premium Term Life Insurance Policy?
Return of premium term life insurance is definitely not a bad choice for life insurance coverage. The only bad choice is life insurance that is needed but not purchased. ROP has its place and is actually preferred by many young families.
Younger families often feel that they will most likely outlive the coverage and like the fact of getting all the money returned at the end of the contract. The life insurance contract acts just like a savings account for them.
Return of premium term life insurance is also not preferred just by younger families, but also people who are ok with spending a little extra for life insurance coverage knowing that they are guaranteed to get their money back tax free at the end of the term length.
We have worked with many clients who have found us online through our article “term life insurance renewal” that wish their original agent had discussed with them prior to purchasing a regular term life insurance policy.
Return of premium term life insurance is also used in many business situations such as business partners needing a buy-sell agreement, with key employees, as well as life insurance coverage that may be needed for a bank loan.
Pros and Cons of Return of Premium Term Life Insurance
PROS
- At the end of the term contract, you’re guaranteed a check for all the premiums paid into the contract.
- Return of premium term life insurance is term coverage so it’s still more affordable than permanent coverage.
- The life insurance contract acts just like a saving account which can be great for younger families.
- The money you receive at the end of the term contract is tax-free.
CONS
- The difference in cost between a regular term policy and a return of premium policy can be up to 30-50%.
- If you cancel the life insurance early, you run the risk of receiving very little to no money at all.
- There is a greater possibility that you can make more money by investing the difference in premium between a traditional term policy and return of premium policy.
- You won’t make any interest on the premiums you will have paid.
Our Top Return of Premium Term Life Insurance Companies
Return of premium term life insurance is one of several types of life insurance coverage options to consider in your search for life insurance. Like all life insurance coverage options, there are pros and cons.
Consider the pros and cons of return of premium term life insurance before making your decision as to if this type of coverage is ideal for you.
Return of premium term life insurance is not offered by every life insurance company. In fact, out hundreds of companies, there are just a few that offer the option.
So to help you out, we put together an extensive detailed list of our top return of premium term life insurance companies.
Your one-stop online guide for life insurance quotes. Get free quotes now!
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How to get an Instant Return of Premium Term Life Insurance Quote
Interested in return of premium term life insurance coverage? The quote form located on this page will allow you to instantly compare the best ROP term life insurance rates.
Simply fill out the required form fields and select the desired ROP coverage length and you will receive rates from lowest to highest priced, based on your input.
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Looking to compare life insurance policies? We can help. Enter your ZIP code to get free quotes from multiple insurers.
Your one-stop online guide for life insurance quotes. Get free quotes now!
Secured with SHA-256 Encryption
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
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.