Best Return of Premium Life Insurance (ROP) Companies 2024

Return of Premium Life Insurance, ROP Term Insurance, ROP Universal Life Insurance, ROP rates, Companies that offer return of premium life insurance

If you’re looking to learn more about return of premium life insurance (ROP) than this article is for you. We will go over everything you need to know to help you make the best decision on whether a return of premium life insurance policy is the best product to meet your life insurance needs and goals.

What Is Return of Premium (ROP) Life Insurance?

At its simplest, return of premium (ROP) is a term life insurance policy that refunds all of your premiums at the conclusion of the term initially secluded if you are alive. View ROP pros and cons here.

Return of premium life insurance (ROP) is commonly referred to as:

  • Life insurance that refunds your premiums
  • Life insurance that pays you back
  • Term life insurance that offers a refund
  • Money back term life insurance
  • Coverage when you need it, money back when you don’t

How Much Does A Return of Premium Life Insurance Policy Cost 2024?

Now let’s take a look at exactly how much a return of premium (ROP) life insurance policy costs. The rates in the table below are for a 40-year old male, non-smoker in excellent health for $250k 20-year term return of premium policy. ROP rates shown are from: Cincinnati Life, Assurity Life, Illinois Mutual, Baltimore Life, United Farm Family and Americo.

Insurance CarrierMonthly Premium for $250k 20-Year ROP
Cincinnati Life$71
Assurity Life$78
Illinois Mutual$82
AAA Life$103
United Farm Family$306
Monthly premium rate chart for a $250,000 20-year return of premium (ROP) life insurance policy for a for a 40-year old male in excellent health

As you can see in the table above, choosing between term life, return of premium or permanent life insurance will come down your needs, goals and budget.

Return of Premium (ROP) Rate Chart

Below is a pricing rate chart for the top four return of premium (ROP) term life insurance companies and their rates for a $500,000 15-year term ROP, 20-year term ROP and 30-year term ROP policies from AAA Life, Cincinnati Life, Assurity Life and Illinois Mutual. Rates are for a 40-year old male in excellent health, non-smoker. The table shows the monthly, quarterly, semi-annual, annual premiums and how much income-tax free money you will receive back at the end of term selected.

Return of premium (ROP) life insurance prices by company for AAA Life, Cincinnati Life, Assurity Life, Illinois Mutual for 15, 20 and 30 year return of premium terms
Return of premium (ROP) life insurance rate pricing table by companies

*Rates for a 40-year old male, in excellent health, non-smoker for $500,000 15, 20 and 30 year return of premium policy.

*We are not associated AAA Life. For more information or to purchase a ROP policy from AAA, please contact them directly.

Life Insurance Companies That Offer Return of Premium (ROP) 2024

The number of life insurance companies that offer return of premium insurance today has shrunk significantly over the last three decades. On a larger scale, life insurers issues with the ROP product’s profitability, cost of capital reserves and popularity have contributed to this reduction.

Life insurance companies that offer return of premium term life insurance include:

The companies listed above offer the return of premium term life insurance product as a stand alone policy or as a rider.

Return of Premium Life Insurance Product Details By Company

AAA Life Insurance Company

American Automobile Association (AAA), founded in 1902 is a privately held not-for-profit national member association and service organization with over 60 million members. AAA offers many types of insurance including: auto, home, life and more. AAA Life Insurance Company has been in business for more than 50 years, has 1.7 million customers and has paid out $5.7 billion in claims. Below are the details for their return of premium life insurance policy.

  • $50k – $5 million in coverage available
  • 15, 20 or 30 year level terms
  • 100% of premiums paid are returned at the end of the term
  • The AAA Life Insurance ROP product is a rider on their traditional term life insurance policy
  • AAA life insurance is A (Excellent) rated by A.M. Best

More information on AAA’s return of premium (ROP) policy can be seen here.


Alfa Insurance

Alfa Insurance has been in business for more than 75 years covering the residents of Alabama, Georgia and Mississippi. Alfa Insurance offers auto, home, farm, business, commercial, health, dental and life insurance. Below are Alfa’s return of premium life insurance policy specifications.

  • $50k and up death benefit
  • ROP term for Alfa is 30 years
  • Avaialbe for ages 6-50 years old
  • A medical exam is required for the ROP policy
  • 100% money back on premiums paid at the end of 30 years
  • Alfa Insurance is financially rated A (Excellent) by A.M. Best

More information on Alfa Insurance return of premium can be viewed here.


Assurity Life Insurance Company

Assurity Group was founded in more than 130 years age in Lincoln, Nebraska and offers life insurance, disability insurance, critical illness, accident, accidental death and annuities. Assurity Life’s return of premium policy specifications are below.

  • Available on 20 and 30 year term life insurance policies
  • Assurity offers the ROP rider option on term life insurance policy amounts of $25k – $10 million+
  • 100% money back on premiums paid at the completion of the term
  • Assurity Life is A- (Excellent) financially rated by A.M. Best

To learn more about Assurity’s term life insurance you can go here.


Cincinnati Life Insurance Company

Cincinnati Life is one the most respected and highest rated life insurance companies in America today that offers return of premium life insurance. Cincinnati Life is known for their term, ROP and universal life insurance polices with competitive pricing for a Superior rated company. Cincinnati also offers non-tobacco rates for smokeless tobacco users (daily cigars, chew, dip, pipe, patch). Cincinnati Life’s return of premiums policy details are below.

  • ROP policy name: Termsetter ROP
  • ROP coverage amounts of $25k – $10 million+
  • ROP level term death benefit for 20, 25 and 30 years
  • Cincinnati Life is one of the only insurers in the nation that offer a 25 year level ROP policy
  • 100% of premiums are returned at the end of the term if the policy is in force and you are living
  • A+ (Superior) financial rating from A.M. Best

More on Cincinnati Life’s return of premium (ROP) policy can be viewed here.


Country Financial

Country Financial was founded in 1925 and is headquartered in Bloomington, Illinois. Country Financial operates in 19 states and is ranked annually on the Fortune 1000 list. Below are Country Life Insurance Company’s return of premium product policy specifications.

  • ROP is a rider on Country Life Insurance’s term life policy
  • Return of premium rider is available on 20 or 30 year level term life policies
  • 100% money back income tax-free on the annual premium payments that were made, not including any additional riders such as disability or child term riders
  • A+ (Superior) financial rating from A.M. Best

More information about Country Financial’s term and ROP life insurance policies can be found here.


Farm Bureau Financial Services

Farm Bureau Financial Services began in 1939 in Des Monies, Iowa to meet the unique liability needs that farmers have. Today Farm Bureau Financial Services has more than 1,900 employees and 4,000 local field associates. Farm Bureau Life Insurance Company offers term, whole, universal life and annuity products. Farm Bureau’s return of premium life insurance product information is below.

  • ROP is available for 20 or 30 year level terms
  • 20-Year ROP- Non-tobacco users ages 18-60, tobacco users ages 18-45
  • 30-Year ROP- Non-tobacco users age 18-50, tobacco users ages 18-45
  • 100% of premiums paid are returned at the end of the term, income tax-free
  • Farm Bureau Life Insurance Company is rated A (Excellent) by A.M. Best

More information on Farm Bureau Financial Services ROP can be found here.


Illinois Mutual Life Insurance Company

Illinois Mutual Life Insurance Company was founded in 1910 and today serves customers in 47 states. Illinois Mutual Life based in Peoria, Illinois offers term life, return of premium, whole life, simplified issue whole life, disability and workplace insurance. Illinois Mutual Life Insurance Company often has some of the lowest rates in the country on their return of premium policies.

  • ROP policy name: Path Protector Plus Term 20 w/ROP or 30 w/ROP
  • Illinois Mutual return of premium is a rider on their level term policies
  • ROP coverage amounts available for $50,000 to $500,000
  • ROP term lengths available are 20 years, 30 years or to Age 65
  • 100% money back for base premiums paid income tax-free
  • Illinois Mutual Life Insurance Company is A- (Excellent) rated by A.M. Best

More information on Illinois Mutual Life Insurance return of premium can be found here.


Kansas City Life Insurance Company

Kansas City Life Insurance Company was founded in 1895 in Kansas City, Missouri and serves 49 states and the District of Columbia. Kansas City Life offers term life, return of premium, universal life, indexed universal life, variable universal life, whole and annuities.

  • ROP guaranteed level premiums for 20 or 30 years
  • ROP policies offer 100% return of premiums paid at the conclusion of the term
  • A- (Excellent) financially rated by A.M. Best

More information on Kansas City Life’s return of premium policy can be found here.


State Farm Insurance

State Farm Insurance is a group of mutual insurance companies with headquarters in Bloomington, Illinois. State Farm was founded in 1922 and is the largest auto and property and casualty provider in America. State Farm is also the highest rated company in America that offers return of premium term life insurance. The specifications for State Farm Life Insurance Company return of premium policy are below.

  • ROP is available for 20 or 30 year level terms
  • ROP coverage starts at $100,000
  • Ages 18-60 are eligible for return of premium term life insurance for 20 years, non-tobacco at the premium rate classes
  • Ages 18-55 are eligible for return of premium term life insurance for 20 years, standard tobacco and preferred tobacco health classes
  • Ages 18-45 are eligible for return of premium life insurance for 30 years
  • 100% of the premiums paid are refunded when the term ends, minus any additional riders
  • State Farm Life Insurance Company is A++ (Superior) rated by A.M. Best

More information on State Farm Life Insurance return of premium can be found here.


United Home Life Insurance Company/United Farm Life Insurance Company

United Home Life was founded in 1948 and their parent company, United Farm Family Life was founded eleven years earlier in 1937. Both companies have combined $2.7 billion in assets and over $22 billion of life insurance in force. Their return of premium policy specs are below.

  • ROP policies do not require a medical exam or lab tests
  • Application only consists of yes/no health questions to determine eligibility
  • United Home Life/United Farm Life ROP policies are named Simple Term 20 ROP
  • ROP coverage amounts available are from $100,000 to $300,000 for a 20 year level term
  • United Home Life is rated A (Excellent) by A.M. Best

More information on United Home Life/United Farm Life can be found here.


ROP vs Term Life vs Universal Life

Below are the rates for a 30-year level term life insurance policy, 30-year return of premium (ROP) life insurance policy and a guaranteed universal life (GUL) insurance policy to age 121 for a 40-year old male in excellent health for a $250k, $500k and $1 million in coverage.

AmountTermROPUniversal
$250k$17$71$131
$500k$28$145$253
$1 million$48$234$478
Rates for a 30-year level term life policy, 30-year ROP term life policy and a guaranteed universal life (GUL) policy to age 121 for a 40-year old male in excellent health, non-smoker.
Term life insurance vs return of premium vs permanent life insurance rates and policy details chart

Return of Premium Life Insurance Advantages and Disadvantages

Let’s take a look at five pros and cons for a return of premium (ROP) term life insurance policy.

Pros
  • You receive all your premiums back at the end of the term if you don’t die
  • The premiums returned are income-tax free since you are using after tax dollars to pay for the policy
  • ROP is essentially a forced savings account (with no interest) which can be good for people who are poor at saving or investing their money
  • It allows people to buy life insurance who otherwise wouldn’t because they cannot afford the proper amount whole life insurance but also don’t like the idea of paying for term life insurance and not receiving anything back if they don’t die
  • A large lump sum payment at the end of the term can help pay down debts such as a mortgage, auto loans or credit cards
Cons
  • Expensive – 5x more expensive than term insurance
  • If you cancel the policy before the term ends, only a pro-rated amount of the premiums are returned (with the most % toward the end of the term. If you cancel in the first few years, then no money is returned
  • There is not any interest or investment return on the premiums you paid for the policy. Many people would see a greater benefit by buying term insurance and investing the difference themselves
  • If you fail to make a premium payment on time and the policy lapses, you loose all your money and the coverage
  • If you die during the term, your beneficiary does not receive the extra money you paid for ROP, only the death benefit of the policy amount

Additional Information On Return of Premium Life Insurance

Return of premium life insurance is ideal for the segment of the life insurance buying public who do not like the concept of purchasing term life insurance and paying premiums every month for 10-30 years and not receiving anything back when the term ends. However, this is how nearly every type of insurance works; auto, home, renters, health, accident, disability, umbrella, boat, travel, cyber, etc.

While whole or universal permanent life insurance would be ideal in a perfect world, the reality is that it is very expensive (5x-10x the cost) compared to level term life insurance to carry the proper amount of coverage to adequately protect your family and replace your current and future income that would be lost in the event of a premature death.

Return of premium (ROP) life insurance is essentially a hybrid between term life and permanent life insurance. The advantages and disadvantages are seen above.

How Is ROP Life Insurance Marketed?

“Coverage when you need it, money back when you don’t”

ROP was once advertised on television, radio and print with slogans such as “Coverage when you need it, money back if you don’t” and “life insurance that’s a win-win-win.”

Quoting A Return of Premium Life Insurance Policy

Receive instant rate quotes for return of premium term life insurance for 15, 20, 25 and 30 years from many of the nation’s best ROP companies. Use our instant online return of premium (ROP) life insurance quoting calculator to see personalized quotes in seconds.


Return of Premium Life Insurance FAQs

What do financial experts such as Dave Ramsey and Suze Orman say about return of premium life insurance?

Financial experts like Dave Ramsey, Suze Orman and Clark Howard recommend to buy level term life insurance and invest the difference yourself. This will allow you to have the most amount of life insurance coverage at the lowest price. You can then put more into your 401k, IRA, invest in the stock market or pay down your mortgage faster.

How does return of premium life insurance work?

Return of premium (ROP) works by paying you back in a lump sum, every penny your paid in premiums if you are alive at the end of the term.

If you die during the term your beneficiary receives the full death benefit but none of the premiums you paid for the policy. Also, there is no interest paid on your premium payments for ROP policies, only the exact amount you paid during the term is returned at the completion of the term.

Is there a penalty to cancel an ROP policy early?

Yes, unlike a traditional term life insurance policy, there is a penalty to cancel an ROP policy early. ROP life insurance cancellation is prorated, meaning in the first few years if you cancel the policy zero of the premium payments would be returned and the longer you keep the policy a greater percentage of the premiums are returned for early cancellation.

Which ROP policy is cheaper, 15, 20 or 30 years?

The shorter the term on a return of premium policy, the more expensive the premiums are. Therefore a 30-year ROP policy is the least expensive.

Is return of premium life insurance available on permanent universal life insurance policies?

Yes, there are several top life insurance companies such as Nationwide, North American and American Amicable, Americo, Baltimore Life that offer a ROP rider on their permanent life insurance policies.

Is there a money back term life insurance policy?

Yes, there are currently several life insurance companies that offer return of premium term life insurance policies that will return all of your premiums if you outlive the term.

Is return of premium life insurance a scam?

No, return of premium life insurance is not a scam. The insurance company will return all of the premiums you paid for the policy at the end of the term if you are still alive and haven’t missed any payments.

Is return of premium life insurance taxable?

No, since you are using after tax dollars to pay for the policy and their isn’t any interest paid, the money that is returned on ROP polices is not taxed. Also, the death benefit is paid out income tax free.

Who are the best/least expensive ROP companies?

The life insurance companies that have the best prices for return of premium term life policies are: AAA Life, Cincinnati Life, Assurity and Illinois Mutual.


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