Affordable Life Insurance Protection for Your Family

Term Insurance with Payback

Learn How Term Insurance with Payback Works


Do you need life insurance but want to get your money paid back if you don’t pass away? 

If so, you may want to consider term insurance with payback of premiums.


How Does Payback Term Insurance Work?

It’s easy to understand – a payback term insurance policy is a type of temporary life insurance that pays back all of your premiums you paid for the life insurance if you are alive when your term policy expires.

However, the insurance company keeps a small portion of the paid premiums to cover fees and expenses related to issuing and servicing your life insurance.

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What’s the Catch?

Well, in order to make money on policies that return your premiums, the insurance carrier charges higher premiums compared to regular term life plans that do not return your premium.


How Does the Insurance Company Make Money If They Return Your Premiums? 

The way the insurer makes money from policies with which they return premiums is that they get more money upfront (higher premiums), and they invest those premiums to get a return on the money during the duration your policy is in force, for example, 15 or 20 years.


How to Get a Term Insurance Payback Policy


Do You Want Life Insurance Protection That returns Your Money If You Outlive Your Policy?

Today there is coverage available that offers you a money-back life insurance plan. You can get cash back if you buy term insurance and outlive the duration of your coverage.


There are Two Types of Cash-Back Life Insurance Policies: 

  • The traditional whole life insurance policy that accumulates cash value within the policy. If you cancel the policy you may receive money from the value inside the policy.
  • Return of premium term life insurance offers you term insurance coverage for a specified period of time.


If you outlive the policy term, you will receive money back from the life insurance premiums you paid into the policy.

However, return premium term life insurance is more expensive upfront than regular level term life insurance plans. 

Basically, you are betting that you will be alive when your policy ends, and you’ll get back almost all of the premiums you paid for your life insurance coverage. But, if the worst happens and you do pass away while your term insurance is "In Force", the death benefit will be paid out to your family (beneficiary – which you select).

The reason insurers developed return of premium policies is because many people feel they are wasting their money on term insurance if they don’t die, their family gets nothing for the premiums they paid for all of those years they had life insurance. 

So, a return premium term life policy is another option for anyone who wants money back if they should be alive when their term insurance ends. 

The insurer has to charge more money upfront for return of premium policies because they invest the money and keep any interest (return) on the money you paid them. But, they have to return your premiums should you outlive the duration of your policy. 

The money the insurer makes on the investment of your premiums while your policy is "In Force" has to pay for the cost of insuring you, which includes processing your application, performing a medical exam, underwriting and issuing your life insurance policy, and servicing your account. 


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JRC Insurance Group helps you shop, compare and save on life insurance. Regardless of your age or health background, we'll shop our 40+ insurance companies and find you affordable life insurance you need to protect your family and fit your budget. Compare the best life insurance rates for savings up to 73%. Get Your FREE Quote


Cash back premium life insurance, also known as Return of Premium (ROP) is one of the newest types of insurance plans available.

Prior to Cash Back policies, there were only term insurance and cash value life insurance plans. 

Many consumers felt like they were throwing their money away since there was no guarantee of a beneficiary ever collecting on their life insurance policy if they outlived the duration of their term insurance.


What is Cash Back Life Insurance?

With a money-back life insurance policy you actually get all of the money you paid in premiums back when your policy expires. That means, if you do not die during the term of your insurance, you basically pay nothing toward having the life insurance in place. 

The money you sent to the insurance company (premiums) is returned to you without taking any taxes out. Basically, it serves as a sort of savings program that ensures you have a nest egg built up when your insurance policy expires.


Why Do Life Insurance Companies Offer These Programs?

Believe it or not insurance companies still make money from insurance policies with cash back programs. This is because they charge more for the premiums that what you would expect to pay for a term insurance policy.

Often, a cash back policy will cost from 10% up to 50% more than other regular term life policies. With this extra money, the insurance company is able to invest the cash and make money. 

Therefore, by the time your policy expires, the insurance company has made money on your money and is able to give you back the premium payments while still making a profit.

These cash back insurance programs are also a great way to build customer loyalty. With a typical term policy, the customer would need to stick with the policy for at least five years before making money off of the policy. 

By offering ROP policies, customers are more likely to stay with the company for a longer period of time.


Who Would Want to Invest in Return of Premium Insurance? 

Money return life insurance is a great idea for anyone that plans to keep their insurance policy for more than five years.

In general, a thirty-year policy will cost you less than a shorter one because your funds will have more time to grow. In addition, you will be able to pay less on a policy if it is for a longer term.

For example, while a 34 year-old male in good health might pay $300 for a $400,000 insurance policy, he might pay $950 per year for a thirty-year policy. That same policy will cost around $1,100 for a twenty-year policy, while a fifteen-year policy will cost $1,525. 

Therefore, if you invest in an ROP life insurance policy, you should look into all of the options and determine which one will provide you with the most coverage for the lowest price – as well as which one will give you the best return in the end, should you outlive your coverage.

Just make sure to compare pricing for all of the different "term lengths" available including 10, 15, 20 and 30 years, to find out the overall cost on return of premium policies for the amount of life insurance you need.


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Top Pick – JRC Insurance Group

JRC Insurance Group helps you shop, compare and save on life insurance. Regardless of your age or health background, we'll shop our 40+ insurance companies and find you affordable life insurance you need to protect your family and fit your budget. Compare the best life insurance rates for savings up to 73%. Get Your FREE Quote

Term Insurance with Payback of Premiums

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