Return of Premium Life Insurance Pros and Cons

When it comes to life insurance, there are many options and many different policies depending on the things you are looking for. If you opt for traditional life insurance (if you are healthy) you can choose between term life and whole life insurance. If you happen to be sick or you can’t afford to go through medical exams that most insurance companies require, you can choose no exam policy that is easy to get, no matter your health condition.

Unlike many things we buy, when it comes to life insurance, we could swear that there is no money back guarantee. Therefore, we choose carefully before we actually purchase it. But what if I told you that you can be protected for some time and still get your money back, would you believe me?

What is Return of Premium Life Insurance?

Return of premium is the only policy that gives you a chance to get your money back after you have bought the policy. And not only that, it gives you few years (usually 20-30 years) of using the benefit before you can get your money back, every last dollar of it.

This policy does have a money-back feature but it is anything but cheap. It works similar to every term life insurance, where you are protected for a certain time and then, in this case, you get your money back.

We already mentioned few pros and cons of return of premium policy, so let’s sum it up.


  • Great deal for people that need smaller coverage
  • Similar to term life insurance – gives you protection for specific period of time
  • It can be added as a feature to your term life insurance (depending on the insurance company you choose)
  • If you outlive your policy, your money will be returned until the last dollar
  • If something should happen to you before the end of the policy, your loved ones will still get the money you agreed on while buying the policy


  • You will get your money but without any interest
  • It costs more than other policies, sometimes even 3 times more expensive
  • Depending on the insurer, this feature could be added only as a reader to a term life insurance policy
  • In case you stop paying your monthly premium or you want to cancel your policy, you will not get your money back
  • There may be a minimum amount of coverage that you will have to buy in order to get this feature

If you are looking for life insurance, make sure you know everything about it. If your choice is the return of premium life insurance feature, make sure you get fully informed about how it works and how you can benefit from it.

If you are looking for a policy that will protect you over a specific period of time, you should consider this option. However, make sure that this feature is what you are really looking for, as you may have to pay way more money than regular term life insurance policy.

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