Is a return of premium rider right for me?

It depends. While adding a return of premium rider to your policy will increase your premiums, it can be a valuable way to set aside money for the future. This option is generally best for people who have a little extra to spend on coverage and want a guaranteed return on their life insurance investment. If you're on a budget, a basic term life insurance policy might be a better fit. Also, remember that unlike some other investments, your term life premiums won't earn interest during the life of your policy. Also, if you lapse your coverage before the return of premium rider expires, you may get less than the maximum benefit.

Is the payment I receive from a return of premium rider taxable?

Typically no, and here's why: At the end of your policy term, you receive back all the payments you put in from the insurance company, including what you spent on the rider itself. Since the return of your premium payments is considered a refund, not a payment, it’s not taxable.

What are some alternatives to a return of premium rider?

If you want to protect your family financially and save for the future, there are a few different options available. One is buying a basic term life policy and investing or saving your money, instead of purchasing a return of premium rider. This can potentially help you earn more money over time, since your money can earn interest, but it may come with more risk. You can also buy a whole life policy that comes with a cash value component, which you can withdraw or use as collateral for a loan. This option is usually more expensive than term insurance, however, whether or not you add a return of premium insurance rider. Ultimately, the best choice depends on your budget, goals, and tolerance for risk. Talk to an agent about your needs.

Return of Premium Insurance Rider

Help your family get the most value out of your life insurance investment, even if you outlive the policy.

What Is a Return of Premium Insurance Rider?

A return of premium (ROP) rider is a type of life insurance rider, or an optional feature you can add to a new or existing life insurance policy. With return of premium, you get reimbursed for some or all the life insurance payments you’ve made over the years if your policy expires while you’re still alive. For example, if you paid $50 a month for 10-year term insurance with return of premium, you could receive $6,000 back – tax-free.

A return of premium rider can be a win-win in the right circumstances: financial security if your family needs it, and your insurance investment returned if you don’t. Regardless of how long you live, you can be confident that your policy will provide a cash cushion for you or your family. That said, adding a return of premium insurance rider will raise your life insurance rates and means you can’t invest those extra dollars elsewhere. Like all life insurance purchases, it’s important to consider your options carefully to find the right fit.

Benefits of Return of Premium Riders

Return of premium insurance riders can help make sure you or your family gets something back from your life insurance investment, no matter what happens. Some of the biggest reasons people choose a return of premium rider include:

Reward for good health

Reward for good health
Full refund

Full refund
Automatic savings

Automatic savings

You’ve Got Questions. We’ve GotAnswers

It depends. While adding a return of premium rider to your policy will increase your premiums, it can be a valuable way to set aside money for the future. This option is generally best for people who have a little extra to spend on coverage and want a guaranteed return on their life insurance investment. If you’re on a budget, a basic term life insurance policy might be a better fit. Also, remember that unlike some other investments, your term life premiums won’t earn interest during the life of your policy. Also, if you lapse your coverage before the return of premium rider expires, you may get less than the maximum benefit.
If you want to protect your family financially and save for the future, there are a few different options available. One is buying a basic term life policy and investing or saving your money, instead of purchasing a return of premium rider. This can potentially help you earn more money over time, since your money can earn interest, but it may come with more risk.

You can also buy a whole life policy that comes with a cash value component, which you can withdraw or use as collateral for a loan. This option is usually more expensive than term insurance, however, whether or not you add a return of premium insurance rider.

Ultimately, the best choice depends on your budget, goals, and tolerance for risk. Talk to an agent about your needs.

Get Return of Premium Rider Quotes From eFinancial

To learn more, start your free, no-obligation online quote or call 866-388-3996800-957-9525 to talk with one of our agents.

Return of Premium Insurance Rider

What Is a Return of Premium Insurance Rider?

Benefits of Return of Premium Riders

Reward for good health

Reward for good health

Full refund

Full refund

Automatic savings

Automatic savings

You’ve Got Questions. We’ve Got Answers

Get Return of Premium Rider Quotes From eFinancial

You’ve Got Questions. We’ve GotAnswers