A Return of premium policy rider on a term life insurance policy allows for part or all of the premiums paid to be refunded at the end of the term of the policy. If you’re still living at the end of the policy, it seems like a good idea to be able to reinvest the funds into another policy or do something different, right? With a return of premium rider, depending on the amount of the policy and the premiums over its lifetime, you may find you’ve invested quite a sum in the end.
Recently a dear friend was offered an early retirement and the return of premium rider on his term life policy made good sense. Since he hadn’t planned to retire, and is now at an age where finding another job puts him at a disadvantage, the premiums he’s paid into that policy have been like an investment in his retirement. Thirty years ago he bought the $500,000 policy and paid his premiums faithfully. Now, he can be refunded the amount he paid for his term life policy to use toward his retirement, to pay off bills he thought he’d have more paychecks for, or anything else that he decides to use it on. Though he’d planned to work a few more years and pay down his mortgage and his car, by using the return of premium option my friend will be able to make those payments.
A return of premium rider on your term life policy costs a little more, but makes sense. Over the course of a 20 or 30 year period knowing you have the peace of mind of the death benefit, and that your family’s needs will be met should the unexpected happen is one thing; but with a return of premium rider, you have the added benefit of flexibility. You get to choose what to do with your investment at the end of the term. You can use the funds to purchase a new policy, pay off debts, add to your retirement or invest in something else.
Talk to your AC Financial Adviser at (800) 564-3136 about making sure your term life policy meets all your needs.