Quick Introduction to Return of Premium Life Insurance
Return of premium life insurance is a type of term life insurance policy that offers a full, tax-free payout of all premiums paid at the end of the policy’s level premium term should you still be living at that time. This essentially means that the policy’s net cost would be zero should you survive the length of the policy. Your premiums with a return of premium policy will typically be higher than those of an average term life insurance policy.
Several factors determine what premiums you’ll pay in a return of premium policy, including the amount of coverage you choose to have, the length of the policy term and personal factors like your age and health at the start of the policy.
Assuming you are a healthy, non-smoker looking for $250,000 of coverage, you can expect return of premium life insurance quotes near the following ranges:
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Age
(yrs)
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Male
($ per month)
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Female
($ per month)
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||
| 55 - 60 | $45 | $40 | ||
| 60 - 65 | $50 | $45 | ||
| 65 - 70 | $55 | $50 | ||
| 70 - 75 | $60 | $55 | ||
| 75+ | $65 | $60 |
Provider |
Annual Payment |
Monthly Payment |
| SelectQuote Life Insurance | ||||
 |
$210 | $18 | ||
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Return of Premium Life Insurance Quotes: Choosing an Insurance Policy
You’ll find a wide variety of life insurance options to consider when you’re looking for a new policy. Familiarizing yourself with the different insurance policy options available to you can put you in a better position to choose an option that works best for you.
Because a return of premium life insurance policy is a type of term life insurance policy, these policies share a lot in common. When you’re considering insurance options, you might notice that companies sometimes present return of premium policies as normal term life insurance policies with an added return of premium rider written into them.
Like other term life insurance policies, return of premium life insurance policies have level premiums that stay the same throughout the length of the life insurance term. Many companies offer options in 10-year, 15-year, 20-year or 30-year insurance terms.
In many cases, you’ll have the option to convert your coverage into permanent coverage at the end of your insurance term. This often means committing to annually increasing premiums that will not be returned going forward. If you keep the converted policy for long enough, you might find that your premiums reach a plateau as many policies set a maximum for increasing premiums.
Varying terms and conditions determine whether or not you’ll get your premiums back if you live through the loan period. These terms typically require that the policyholder is still alive, that the death benefit has not been paid during the initial level premium period and that all scheduled premiums have been paid throughout the length of the policy.
Return of Premium Life Insurance Quotes: Coverage Amounts
You’ll want to consider how much coverage you’ll need before deciding which life insurance quote is the ideal solution for you. It’s best to think about both policy length and your desired coverage amount.
The coverage amount a return of premium life insurance policy offers varies widely with some select policies reaching up to $10 million. Typically, higher coverage amounts and longer insurance terms will both translate to paying a higher price for your policy.
As is also the case with normal term life insurance policies, policyholders of return of premium life insurance policies often outlive their loan terms. It’s important to remember that the coverage you choose sets the amount of the death benefit your loved ones will receive should you die during the length of the policy.
Factors to consider when you’re deciding on a sufficient coverage amount include your current income, debt owed, savings, whether or not your have an insured mortgage and any investments you may have. Your spouse’s finances can also affect your coverage needs. More coverage might be necessary if your partner isn’t also making steady income.
Whether or not you have children or plan to have children in the near future can play a role in the coverage amount you opt for as well. It’s important to consider whether you’ll need a more extensive policy for covering college funding and other living expenses that might come into the picture should you pass away while your children are still your dependents.
Getting a Return of Premium Life Insurance Quote
Many life insurance companies offer online estimates, allowing you to get a readily available idea of what your options are before choosing a policy.
Typically, life insurance companies will consider personal factors related to your lifestyle and overall health when they determine what quote to offer you. They might consider attributes like age, weight, alcohol or tobacco use habits and overall reported health. In some cases, you might be asked about your family medical history as well.
It’s best to be prepared to provide a lot of personal details about yourself when you’re looking to get a return of premium life insurance quote. You might be asked to provide your address, contact information, date of birth, height, weight and gender.
Companies might also ask about your lifestyle, occupation and any hobbies or habits you might have that could be deemed risky. If you participate in extreme sports or work in dangerous conditions you might be offered a pricier policy.
It’s important to answer all questions a life insurance company asks you honestly. If you’re misleading about your lifestyle or habits and die an untimely death from one of these risk factors, your beneficiaries could be denied payment. For example, your policy might not pay up if you failed to disclose that you were a smoker and died of smoking-related complications before your level premium period was over.
How to Choose the Best Coverage for You
It’s a good idea to shop around and get multiple quotes when you’re looking for a life insurance policy. Comparing rates will increase your odds of finding the best rate available to you for your circumstances. It’s best to be honest with yourself about the amount of coverage you’ll need for your situation. This will help ensure that the policy you pick adequately insures you if you pass away before the policy’s level premium period ends.
All life insurance options come with varying advantages and disadvantages and return of premium life insurance policies are no exception. Consider how your needs fit with what each policy provides or doesn’t provide to determine what option is the best fit. It’s important to think about all the risks and benefits and decide what’s most important to you.
For example, if paying lower premiums through the course of the policy while still having an adequate death benefit is more important to you than receiving you returned premiums, you might want to consider a traditional term life insurance policy rather than a return of premium policy. But a return of premium policy might be the right choice for you if you’re willing to take the risk of passing away early for the chance of having your premiums returned to you down the road.
How to Pick a Life Insurance Company
It’s a good idea to do a little bit of research when you’re looking for the right life insurance company. Be sure to check for reviews, complaints filed and credit and better business bureau ratings.
State Farm, AIG Direct, Prudential and AAA Life Insurance Company are a few well-known companies that offer return of premium term life insurance coverage options. State Farm offers return of premium policies starting at $100,000. AAA Life Insurance Company treats their policies as typical term life insurance policies with an added return of premium rider, offering premiums ranging between $100,000 and $10 million.
Life Insurance Study: America's Healthiest Places
SmartAsset's interactive map highlights the healthiest counties across the country. Zoom between states and the national map to see data points for each region, or look specifically at one of the three factors driving our analysis: length of life, health behaviors and healthcare access.
1 Years of Potential Life Lost before the age of 75 per 100,000 residents
2 Primary Care Physicians per 100,000 residents
Methodology Our study aims to find the healthiest places in the country. An individual's health is key to assessing life expectancy, which is the ultimate determinant of the price one pays for life insurance. To find America's healthiest places we considered three factors: length of life, health behaviors and healthcare access.
The first factor we considered was the premature death rate in a county, specifically the years of potential life lost before age 75 per 100,000 residents. This number shows the rate at which people die before the age of 75. Places with the lowest rates of premature death generated the highest length of life index values.
Second, we created a health behaviors index for each county. This reflects the counties with the healthiest behaviors, as measured by three data points: the percentage of adults that are current smokers, the percentage of adults that are obese and the percentage of adults that report binge or heavy drinking. We indexed each of these data points on a scale of 0 to 100, took a weighted average, then indexed the final number to generate the health behaviors index.
Third, we considered access to healthcare as a secondary measure of how healthy each county is, given the impact this has on health outcomes. We looked at the rate of primary care physicians per 100,000 residents. We also looked at the uninsured rate, or the percentage of the population under age 65 without health insurance. We indexed each of these data points on a scale of 0 to 100, took a weighted average, then indexed the final number to generate the healthcare access index.
Finally, we used a weighted average of the three indices above to yield an overall healthiest places score. We used a 50% weighting for length of life, a 30% weighting for health behaviors and a 20% weighting for healthcare access. We indexed the final number so higher values reflect the healthiest places
Sources: County Health Rankings
