Return Of Premium Rider vs. Regular Term Insurance
illustration shows the cost difference
between purchasing regular term life
insurance vs. one term life insurance with a
return of premium rider.
A 30 year old male, assuming he is in excellent health. We are quoting a 30 year old male for a 30 year term life policy with a $500,000 face value amount. Without the return of premium rider, the annual premium will cost approximately, $360 per year for a total of $10,800 premiums paid over the 30 year period. By adding the return of premium rider, the premium jumps to $590 per year, for a total outlay of $17,700. That’s a total difference of $6,900 premiums paid ($230 per year) or a 63.88% increase. The break even point between the higher cost of the return of premium policy verses investing the difference is about 6%. So it is a very good deal.