Return of Premium Life Insurance (ROP)

Return of premium (ROP) life insurance is a term insurance policy that provides death benefit protection and a return of premium feature, designed to overcome one of the greatest objections to term life: “I am probably not going to die and my money will have been wasted.”

Here’s how it works: If you keep your policy for the term period, at the end of that time whether 15, 20, 25, or 30 years, the life insurance company returns the entire premium you paid on the policy. 
There also is partial return of premium if the policy was canceled before the end of the term, depending on year it’s canceled—the longer it’s kept, the higher the amount of the return.

Unlike regular term, ROP rewards you for keeping the policy by giving a guaranteed return of total cumulative premium paid on the policy during the level term period.

Here is an example:

Male, age 35 with a Preferred Non-Nicotine rating, $500,000 of 20-year return of premium life insurance:
Annual premium = $1,120 (guaranteed to remain level for 20 years)
Return of premium after 20 years = $23,388 ($1,120 x 20 yr = $23,388)

The life insurance return of premium is considered income tax free, because you aren’t receiving back more than you paid in over the life of the policy.  ROP term Life insurance policies feature fully guaranteed level premiums for the first 15,20,25,or 30 years.  


AAA Insurance Agency is a full service Life & Health insurance brokerage.  For information on Life Insurance or to receive a Life Insurance Quote call one of our professional AAA insurance agents at 800-974-1222.