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What is Term Life Insur­ance with Return of Pre­mi­um?

What happens if you outlive your life insurance? We have a solution.

So, you’re thinking about purchasing a term life policy – that’s great. You’re about to take an important step in securing your family’s financial future, and in one of the most affordable ways to do so.

At this point, you might be a little hesitant – what if you never need the policy? What if you pay premiums for decades, but still outlive your insurance protection? We already thought of that, and we have you covered. Literally. It’s a little something called return of premium. Let’s learn about 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, let’s quickly refresh ourselves on 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 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. But that’s actually the best scenario! If you don’t receive an insurance benefit during the protection period, that means you’re still alive and hopefully healthy. Owning a policy is worth it just for the peace of mind and financial stability it provides.

Still, you might want the option to get something more than peace of mind from your insurance. That’s where the optional return of premium benefit comes in. If you outlive your insurance level term period, you get cash. Specifically, the premiums you paid for your base term life insurance and the optional return of premium benefit (minus any benefits previously paid under the policy) are returned to you as a lump sum. Even better, the lump sum generally isn’t taxable (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 your age, gender, how healthy you are and a few other factors. For Assurity Term Life Insurance, the optional return of premium benefit is only available for 20 or 30-year terms. It will add a cost to your insurance premium, 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, take a look at Assurity’s life insurance products.

*Return of premium benefit provided under the Endowment Benefit Rider, known as the Return of Premium Rider in some states.


Policy Form No. I L1702 and Rider Form Nos. R I1506, R I0827-T, R I1706, R I0762, R I0763, R I1703, R I0825-T, R I1704, and R I1705 underwritten by Assurity Life Insurance Company, Lincoln, NE.

Assurity is a marketing name for the mutual holding company Assurity Group, Inc. and its subsidiaries. Those subsidiaries include but are not limited to: Assurity Life Insurance Company and Assurity Life Insurance Company of New York. Insurance products and services are offered by Assurity Life Insurance Company in all states except New York. In New York, insurance products and services are offered by Assurity Life Insurance Company of New York, Albany, NY. Product availability, features and rates may vary by state.