Return of Premium Life Insurance - Use As An Investment

Use As An Investment

If a return of premium policy is viewed as an investment, rates of return are calculated based on the incremental cost above the cost of regular term insurance. A sampling of policies found returns in the range of 2.5 to 9 percent.

Critics point to the rate of return being less than in a typical investment, the extra cost of the policy compared to basic term life insurance policies and that, if the policy is canceled at any time, no money is refunded. Many policies do allow prorated refunds at some point during the life of the policy.