Important Facts

What is a Term Insurance Return of Premium Rider?

Some term life insurance policies come with optional policy riders such as the return of premium rider. This article takes a look at what a term life return of premium rider is and how it works.  

Return of Premium Riders

What a Return of Premium Rider and How Does it Work?

When you buy a life insurance policy, you may have the option of adding a wide array of policy benefit riders that can be a way to customize your coverage.

Commonly referred to as policy riders or special endorsements, these features can be attached to a basic policy contract to enhance the flexibility and fit of the policy to meet your specific needs. One such rider is a term insurance return of premium rider.

What Is a Return of Premium Rider and How Does it Work?

A term insurance return of premium rider is typically offered as a separate endorsement on your term life insurance policy. Although, some life insurance companies may write specific policies that already include the built-in benefit of a return of premium rider.

It works by providing you, the policy holder, a return of your premium dollars if you are still alive when your term policy comes to an end. For example, if you purchased a 20-year term policy at age 30 and now, 20 years later at age 50 you're still alive, your money will be refunded to you.

Premiums can be pricey

The premiums for adding a term insurance return of premium rider, or purchasing a policy with this built-in provision, will typically cost you more than a traditional term policy or a term policy without the rider. For this reason, you'll want to consider whether or not it's worth the additional cost compared to buying a traditional term policy for a longer term, increasing your death benefit coverage, or even purchasing a permanent life insurance policy.

When it comes to policy riders, there isn't a one-size-fits-all answer to whether any one rider (or multiple riders) are right for you. Speak to your agent or company representative who can help you weigh all of your policy options to find out what's best for your individual needs.


Note: Not all life insurance companies offer the same type of policy riders. In addition, riders are subject to underwriting and may not be available with certain health conditions or occupations.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Benefit Riders

Some term life insurance policies come with optional policy riders. One such rider is the return of premium rider. This article takes a basic look at what a term life return of premium rider is and how it works. For more information, visit the Protective Life Learning Center.

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