What is return of premium life insurance and is it a good deal?
Answered by 2 licensed agents
At first glance, this can sound very attractive because it addresses one of the most common objections people have to term insurance, namely that they may pay premiums for years and never receive a benefit. However, return of premium policies typically cost significantly more than traditional term life insurance policies.
In my experience, return of premium life insurance is usually not the best value for most people. The additional premium required to obtain the refund feature can often be invested elsewhere with greater flexibility and potentially better results. When I compare options for clients, a traditional term policy combined with a disciplined investment strategy is frequently the more efficient solution.
That said, there are situations where return of premium coverage may appeal to individuals who like the idea of having a guaranteed refund if they outlive the policy term and who value that certainty over maximizing potential investment returns.
As an independent agent representing virtually all major life insurance companies, I evaluate both options when appropriate. In most cases, however, I find that clients are better served by purchasing the coverage they need at the lowest reasonable cost and putting the premium savings to work in other areas of their financial plan.
Answered by Marc Frye on June 17, 2026
Agent Licensed in NV
Answered by Philip Santucci on June 17, 2026
Broker Licensed in IL, FL, MI, MN & TX
Tags: Term Life
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