When it comes to term life insurance, many consumers seek policies that offer a return of premium (ROP) feature, allowing them to recoup premiums paid if they outlive the policy term. Here, we explore the top three providers of return of premium term life insurance: Assurity Life, Illinois Mutual, and Cincinnati Life. These insurers offer competitive policies, each with unique features to help policyholders save while securing financial protection for their loved ones.
There is a high cost to the insurance companies to offer return of premium term, many companies no longer offer the product. Many have shifted to permanent products that generate cash value. We will review the top life insurance companies that still offer it.
Assurity Life Return of Premium Term Life Insurance
Assurity Life offers a robust term life insurance policy with the option to add a return of premium rider. This feature allows policyholders to receive back all premiums paid if they outlive the policy term, providing a valuable saving mechanism.
- Policy Terms: Available in 20, 25, and 30-year terms.
- Coverage Amounts: Assurity offers flexible coverage options starting as low as $25,000, making it accessible to a broad range of consumers.
- Features: The ROP rider provides a tax-free return of all premiums at the end of the term. Assurity also offers a variety of additional riders, including waiver of premium and accidental death benefits.
Assurity Life’s ROP term policy is a solid choice for young adults and families looking for reliable coverage with the added benefit of a forced savings component.
Illinois Mutual Return of Premium Term Life Insurance
Illinois Mutual offers a return of premium option on its term life insurance policies, which is ideal for those looking to recover their investment while maintaining coverage.
- Policy Terms: Illinois Mutual provides term options of 20, 25, and 30 years.
- Coverage Amounts: Coverage can start at $50,000 and go up to $500,000, accommodating both individuals and families with varying coverage needs.
- Features: Illinois Mutual’s ROP rider ensures that all premiums are returned if you outlive the policy, and they offer additional riders, such as disability income and critical illness riders, enhancing the value of the policy.
For consumers seeking flexibility and the potential to add additional protection, Illinois Mutual is a competitive choice. The return of premium feature makes it a cost-effective option for those who want life insurance with a savings benefit.
Cincinnati Life Return of Premium Term Life Insurance
Cincinnati Life’s ROP term insurance is a popular choice for individuals who want the security of life insurance with the potential to receive their premiums back. Cincinnati Life’s policies are straightforward and user-friendly.
- Policy Terms: Policy terms include 20, 25, and 30-year options.
- Coverage Amounts: Coverage is available from $50,000 to over $1 million, making Cincinnati Life a suitable option for both moderate and high coverage needs.
- Features: The return of premium feature guarantees the return of all premiums at the end of the term, and Cincinnati Life also offers other riders, such as a child term rider and an accelerated death benefit rider.
Cincinnati Life is well-suited for individuals seeking higher coverage amounts with the reassurance of a premium return, making it a practical solution for those who need significant life insurance coverage and appreciate added benefits.
Comparing the Top Return of Premium Term Life Insurance Providers
| Provider | Policy Terms | Coverage Amounts | Key Features |
|---|---|---|---|
| Assurity Life | 20, 25, 30 years | $25,000 and up | Waiver of premium, accidental death rider, tax-free return of premiums |
| Illinois Mutual | 20, 25, 30 years | $50,000 to $500,000 | Disability income, critical illness rider, return of all premiums |
| Cincinnati Life | 20, 25, 30 years | $50,000 to over $1 million | Child term rider, accelerated death benefit, premium refund at term end |
What happened to return of premium term?
Return of premium (ROP) term life insurance was once offered by several major life insurance companies, allowing policyholders to receive back all paid premiums if they outlived the policy term. Over the years, however, many insurers have discontinued these policies due to high costs and changing consumer preferences. Here’s a look at some notable companies that previously offered ROP term life insurance.
State Farm
State Farm once offered ROP term life insurance, which allowed policyholders to receive a refund of premiums if they outlived their policy term. However, State Farm discontinued this product in the late 2010s due to low demand and high costs, now focusing on traditional term and permanent life insurance options.
Prudential
Prudential was another well-known provider of ROP term policies. This option was popular for consumers seeking a combination of life insurance and savings. Prudential has since stopped offering ROP term life, shifting its focus to products like indexed universal life (IUL) and other types of life insurance.
MetLife (Brighthouse Financial)
MetLife, now operating under the brand Brighthouse Financial for its life insurance products, previously offered ROP term policies. With its rebranding, MetLife has phased out ROP term life insurance in favor of products like traditional term life, universal life, and annuities.
AIG (American General)
AIG offered a return of premium option on its term life policies in the past, providing a refund of premiums at the end of the term. However, AIG phased out these products due to profitability concerns and now offers a range of other term and permanent life insurance policies.
Transamerica
Transamerica also used to provide ROP term life insurance policies with various term lengths. They phased out these policies in the late 2010s as more consumers began to prefer traditional term life insurance without the premium return option.
Banner Life Insurance (Legal & General America)
Banner Life, part of Legal & General America, offered ROP term policies at one time. They have since shifted their focus to standard term life and permanent policies that meet modern consumer needs.
Why Did Companies Stop Offering ROP Term Life Insurance?
While ROP term life insurance was attractive to some consumers, companies found several reasons to discontinue the product:
- High Costs: ROP policies tend to have higher premiums, which deterred many consumers.
- Low Profitability: Insurers faced reduced profits due to the need to return all premiums paid by policyholders who outlived the policy term.
- Shift in Consumer Preferences: Many consumers found that alternative investment products provided better returns, leading to a decline in demand for ROP term insurance.
- Focus on Alternative Products: Insurers have increasingly shifted to products like indexed universal life and other types of permanent insurance, which offer cash value and investment options.
Today, ROP term life insurance is less commonly offered. Companies like Assurity Life, Illinois Mutual, and Cincinnati Life continue to provide ROP term options, but they are rare compared to more traditional forms of term and permanent life insurance.
Ready to lock in your return of premium term policy?
If you’re considering a term life insurance policy with a return of premium feature, these top providers offer competitive options to meet various financial needs. For more information, start by using the life insurance quoter on this page. Our team can help you find the best policy for your unique situation.
FAQs for Return of Premium Term Life Insurance
What is return of premium term life insurance?
Return of premium term life insurance is a policy option that provides life insurance coverage for a set term and refunds all paid premiums if the insured outlives the policy term.
How does return of premium term life insurance work?
When you purchase a return of premium term life insurance policy, you pay a fixed premium for a specified term. If you survive the term, you’ll receive a refund of the premiums paid, tax-free.
Is return of premium term life insurance worth it?
For individuals who prefer guaranteed savings and don’t mind paying a higher premium for life insurance, the return of premium feature can be a valuable addition, offering financial security and investment return.
Who should consider return of premium term life insurance?
This type of insurance is ideal for those who value both life insurance coverage and a guaranteed way to recoup their premiums if the policy is not utilized.
What happens if I cancel my return of premium term life insurance early?
If you cancel early, you may receive a partial refund of the premiums paid, depending on how long the policy was active before cancellation.
