What is Term Life Insur­ance with Return of Premium? 

Purchasing life insurance is an important step in securing your family’s financial future, but it often comes with some hesitation. What if you never need the policy? What if you pay premiums for decades, but still outlive your insurance protection?

There’s a simple answer – the return of premium benefit. In this article, we’ll discuss how term life insurance works and how the optional return of premium benefit can set you up for financial success no matter where life takes you.

• What is term life insurance?
• What is return of premium?
• How much does return of premium cost?

What is term life insurance?

Before we get into how term life insurance with optional return of premium works, here are the basics of term life insurance. Term life insurance:

• Is one of the most affordable types of life insurance
• Pays a sum of money (a benefit) to your beneficiary if you die while covered
• Lasts for a certain length of time (a term), usually 10, 20 or 30 years
• Gives you the option to lock in level premium payments for the duration of the term period

It’s a great choice for people who need protection for a limited amount of time or want the most affordable coverage. For more in-depth information on term life insurance and whether it’s the right type of insurance for you, check out our article What Kind of Life Insurance and How Much?

What is return of premium?

Since term life insurance lasts for a predetermined amount of time, some people are concerned that it’s a purchase they won’t use. That’s often a good outcome – life insurance isn’t something you ever want to use, and outliving your insurance means you’re still alive and hopefully healthy.

Still, you might want the option to get more than peace of mind from your insurance purchase. That’s where the optional return of premium benefit comes in.

It gives you back a portion of what you paid for your insurance as a lump sum. This means that you get cash back if you outlive your coverage. Specifically, it returns the premiums you paid for your base term life coverage and the optional return of premium benefit (minus anything the policy has already paid out). Even better, the payment is generally tax-exempt, but all tax questions should be referred to a qualified tax advisor.

You can use the returned premium for anything – pay off a car, finally finish your basement, take a nice vacation or add to your retirement fund. It’s a great way to be protected when you need it most, while still building toward a strong financial future.

What does return of premium cost?

The cost for the optional return of premium benefit depends on a few factors, including:

• Age
• Gender
• Current health

With Assurity’s Term Life product, the optional return of premium benefit is available on 20- and 30-year terms. It adds an additional cost but recall that the additional premium for the return of premium benefit will also be returned if you outlive your policy.

If you think that term life insurance with return of premium is right for you, the next step is for you to speak with an insurance professional. They’re a key resource for answering your questions and assessing your needs to make sure you’re getting the coverage that’s right for you. Now that you know the basics of term life with optional return of premium, you’ll be better prepared to have this important conversation and secure your future.

For more information before you visit with your insurance professional, browse Assurity’s life insurance products.