Return Of Premium Rider vs. Regular Term Insurance
This
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.