Return of Premium
Return of premium term is a life insurance policy that refunds your paid premiums upon maturity of the term.

What is Return of Premium Term Life Insurance?

If term life insurance is like paying rent or fee for service, return of premium term (ROP term) is like getting your payments back. It’s that simple. Only a handful of life insurers in the market offer this coverage. The only downside is that you are going to pay higher premium for the right to receive a refund. The upside is that you would lose nothing at the end of the term.

How much does Return of Premium term cost?

Click here for a sample PDF illustration of ROP term life insurance.

This 30-year return of premium term illustration shows exactly how the plan works. You also have the conversion privilege to switch your term life into a permanent plan until age 70. Restrictions apply. Just remember, this is not a cash-value policy. There are no dividends that the insurance company shares. It only refunds the premiums you paid into the policy, minus any loans, during the term. Most of these plans come with a free a rider called Accelerated Benefits Rider which allows the policyowner to request a portion of the policy’s face amount if the insured is diagnosed by a physician with a terminal illness that is reasonably expected to result in death within 24 months or has been confined continuously for 90 days in a nursing home and is reasonably expected to remain there for the duration of the insured’s life. The maximum lifetime benefit available is the lesser of 50 percent of the death benefit or $250,000.

Refund of Premium Term Rates

Coverage Amount:$500,000
at Preferred Risk
Length of Term: 30
Return of Premium
Return of Premium
All rates are subject to age and state availability. Subject to underwriting.

As you can see the cost involved in buying a ROP term life insurance is definitely higher than the the traditional term life. So, is it worth it? I think it depends upon your affordability, risk tolerance and individual tax-bracket.

Best Return of Premium Term Life Insurance Companies in 2023

Not all insurance carriers offer this coverage. Here are the top two insurance companies that offer ROP term life insurance:

  • Assurity Life
  • Cincinnati Life

Get real-time Quotes for Life Insurance

Go to and choose the kind of life insurance plan you are looking for. If you want to see an illustration on how a return of premium life insurance will work, give us a call at 1.866.526.7264.

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The Goodman Triangle and and Gift Tax

The Goodman Triangle Explained

The ‘Goodman Triangle’ refers to a court case (Goodman vs. Commissioner of Internal Revenue) in 1946. Read here about this in detail. The gist of this case was that life insurance policies were purchased with the insured, the owner and, the beneficiary as three different entities. This caused a gift-tax situation. Most of us know that the life insurance proceeds are federal income tax free.

So, if you have $1,000,000 in the bank and, also a $1,000,000 life insurance plan, upon your death, what you had in your bank will be considered your estate and will be appropriately taxed. Whereas, the life insurance policy proceeds will be untouchable. Life insurance has a unique position in financial planning. No one can touch the death benefit upon insured’s death. It just belongs to the beneficiary.

Let’s consider this situation:

  • A = insured
  • B = the owner, the one who pays for the policy, and
  • C = the beneficiary, the one who receives the death benefit proceeds upon the death of the insured.

Let’s say B buys a life insurance policy on A and, makes C the beneficiary. A lot of time this situation comes where a parent wants to buy a cash value whole life plan on the kids and also make the kids the primary beneficiary of the on each other’s policy.
According to the US tax code, upon the the death of the insured, death benefit now becomes a gift from the parent to the child (beneficiary). As a result, it is taxable as income. Learn more about gift tax at

To avoid this situation, for all life insurance policies

  • the insured and the owner have to be the same, or
  • the owner and the primary beneficiary must be the same person.
Well, next time you want to buy a life insurance policy on one of your loved ones, you now know what not to do.
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whole life insurance for teenagers

A cash value whole life insurance policy can be a great option for younger population. These life insurance plans not only work as a life insurance policies but also accumulate deferred cash over time. The insured can use this cash to fulfil whatever he or she needs and wants in the future.
The premium of a whole life insurance plan for a depends upon how the policy is designed. Something else also needs to be kept in mind when looking to set it up for a teenager.
There are two kinds of whole life insurance plans in the market:

  1. Non-participating whole life
  2. Mostly stock companies offer non-participating policies the annual profits are not shared and no dividends are paid to the policyholders.
  3. Participating whole life
  4. Almost all mutual companies offer participating whole life. Every year, they allow a portion of the company’s profits to be paid out in the form of policy dividends as refunds. This allows an accelerated deferred cash accumulation overtime.

The premium for a $500,000 participating policy for a male in good health is $305.37 monthly. Whereas the premium for the same policy for a female is $265.79 monthly.
The non-participating policy premium is usually lower. For example, it is $197.12 for a male and $177.32 for a female.

Single Premium Whole Life

For how long you want to pay the premium depends entirely on you. A whole life can be from a single premium whole life to any number of years that you desire to pay. Once the premiums are paid, you no longer put anything into the policy. But your cash value keeps increasing over the years. In a participating plan, even the death benefit increases over time. This gives a kind of inflation protection to the beneficiary.

For example, a single premium for $500,000 non-participating whole life for a 19 years old non-smoker female in excellent health is $48,425. For a 19 years old male, the same policy will cost a single premium of $56,485.

It is important to understand the difference between these two whole life insurance plans. It is even more important if the target of a whole life policy is to accumulate as much cash value as possible over time.

Participating whole life plans are primarily sold by mutual life insurance companies. A few of these carriers include Penn Mutual, Mass Mutual, and New York Life. Since these companies don’t have stockholders, part of the gains they have for a given year is shared with the policy holders. These are called dividends. As a result, the cash value accumulation is much larger in participating cash value whole life insurance policies.

Non-participating whole life policies do not offer dividends. These plans offer an interest rate of usually between 2 – 3%. Because of this, the cash value accumulation is not that sharp. That is the reason why these plans are less expensive compared to participating whole life plans.

Also keep in mind that whole life insurance plans can be and should always be custom-designed to suit your need and affordability.

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Latino family

Here is a quick comparison of premiums between term life and whole life and guaranteed permanent  universal life. To create these quotes, carefully selected, highly competitive carriers are used. This table below is able to offer some clarity on what to expect from various guaranteed life plans. I offered these options to a real client of mine. See the rounded premiums below.

A Quick Comparison of Life Insurance Premiums

Insure in MInutesReal-time Life Insurance Rates

Face amount: $1000,000
10 Years Term
(convertible to guaranteed universal and whole life)
$19 monthly
20 Years Term
(convertible to guaranteed universal and whole life)
$34 monthly
30 Years Term
$64 monthly
30 years
Refund of Premium Term
$132 monthly
Universal Life (pay only till 65)
(Lifetime of coverage without cash values)
$583 monthly
Whole Life (pay only till 65)
(Lifetime of coverage with cash values)
$1,446 monthly
Please note: The rates quoted are estimates and are subject to underwriting by the insurance carrier.
Rates do not include optional riders. For a no-obligation consultation, call us at 1.866.526.7264.

The lowest premium term life plan may not be the best option for you.

When you see an ad on TV promising hundreds of thousands of dollars worth of term life insurance for a ridiculously low price, you need to keep in mind that they are only throwing a bone at you to call them. These ads only promote a 10-year term plan for those in perfect health (super preferred risk class). Obviously, the low premium quoted makes it look like a breeze to buy life insurance. There are a lot of good life insurance advisors out there to serve your best interest. It is important to talk to them in detail before taking a life policy.


The premium difference is obviously huge. While there is no right or wrong life insurance plan, it is what you need and afford that dictate the kind of life insurance plan you should go for. Life insurance can work as a mortgage protection vehicle, something to protect a loan, or an estate planning tool. Term life insurance plan can hardly take care of the death tax or estate tax issue. To take care of that, you must look into a guaranteed permanent life insurance option as a guaranteed financial legacy. Limited premium or single pay whole life and universal life insurance plans are very useful for those looking into covering estate tax through life insurance.

  • Premiums always remain level during the duration of a term in term life plan.
  • Universal life and whole life plans are usually custom-designed to suit your needs and affordability.
  • All quotes are subject to underwriting, age and state availability.
  • Always ask for optional riders that may enhance the value of your life insurance policy.

Purchasing life insurance is a major financial decision. Let not a few sleek TV ads or aggressive marketing sway you. A quick comparison of premiums, and what a life insurance plan can or cannot do for you is very important. Talk about your current and future family protection needs to a professional before you buy one. In a remote work environment, always ask for a virtual meeting.

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