3 Best Return-of-Premium Life Insurance Policies in February 2024

Compare top-rated companies that offer life insurance with a money-back guarantee.
Katia Iervasi
By Katia Iervasi 
Updated
Edited by Lisa Green

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An insurance policy generally isn’t something you can return for your money back. But there’s one exception: return-of-premium life insurance.

Also known as ROP life insurance, this type of coverage reimburses you for the money you paid in premiums if you don’t die during the term. Some insurers offer it as a stand-alone policy, though it’s commonly sold as a rider that can be added on to a life insurance policy.

This list focuses on return-of-premium policies that are sold separately. To narrow down the list, we looked at coverage amounts, term lengths and state availability, as well as insurers’ financial strength and reputation among customers.

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Our picks for the best return-of-premium life insurance companies in February 2024

All of the companies listed below scored at least 3 out of 5 stars. While return-of-premium is an uncommon product, it’s a good idea to compare life insurance quotes from at least two companies before making a decision.

5.0

NerdWallet rating 

Cincinnati Life

4.0

NerdWallet rating 

Illinois Mutual

3.0

NerdWallet rating 

NerdWallet rates insurers at the company level, not the policy level. This means our star rating reflects the company as a whole, and not its ROP insurance policy specifically.

How we ranked the top life insurers

NerdWallet’s life insurance ratings are based on consumer experience, complaint index scores from the National Association of Insurance Commissioners for individual life insurance and weighted averages of financial strength ratings, which indicate a company’s ability to pay future claims. Within the consumer experience category, we consider ease of communication and website transparency, which looks at the depth of policy details available online. To calculate each insurer’s rating, we adjusted the scores to a curved 5-point scale.

These ratings are a guide, but we encourage you to shop around and compare several insurance quotes to find the best rate for you. NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.

In our life insurance reviews, our editorial team considers the customer and the insurer. These are some of the factors we take into account:

Policies offered. There are many types of life insurance on the market, and they fall into three key categories:

  • Term life insurance offers temporary coverage and a guaranteed payout if the policyholder dies during the term.

  • Permanent life insurance typically lasts a lifetime and builds cash value that can be borrowed against in the future.

  • No-exam life insurance issues coverage without the need for a medical exam.

Financial strength. We use AM Best ratings to confirm an insurer’s long-term financial stability and ability to pay claims. For life insurance, NerdWallet typically recommends considering insurers with ratings of A- or higher. Here’s the breakdown:

  • Exceptional: A+, A++.

  • Strong: A-, A.

  • Moderate: B, B+.

Complaints. These ratings are based on complaints to state regulators relative to a company’s size, according to three years’ worth of data from the National Association of Insurance Commissioners. The best life insurance companies have fewer than the expected number of complaints.

Buy online. This indicates whether an insurer allows you to apply for and buy a policy completely online.

Best return-of-premium life insurance policies: Pros and cons

Learn more about our top ROP life insurance companies in 2024 by reading the summaries below and checking out our comprehensive reviews.

Jump to:


Best for earning a discount
insurance-product-card-logo

State Farm

5.0

NerdWallet rating 
Bottom line: If you have a State Farm auto insurance policy, purchasing a ROP policy with the company may earn you a discount on your car insurance premiums.

on Nerdwallet

Financial strength rating

Exceptional

Online purchase

No

NAIC complaints

Fewer than expected

Policies offered

Term, permanent & no-exam
Best for earning a discount
insurance-product-card-logo

on Nerdwallet

State Farm

5.0

NerdWallet rating 
Bottom line: If you have a State Farm auto insurance policy, purchasing a ROP policy with the company may earn you a discount on your car insurance premiums.

Financial strength rating

Exceptional

Online purchase

No

NAIC complaints

Fewer than expected

Policies offered

Term, permanent & no-exam

Overview: Open to applicants from 18 to 60 years old, State Farm’s return-of-premium life insurance policy offers coverage starting at $100,000. Depending on your age, you can buy a policy lasting 20 or 30 years. If you’d like to convert your policy to permanent life insurance, you can do so up to age 75.

State Farm allows you to add a children’s term life insurance rider to your policy, as well as a waiver of premium rider, which pauses your premiums if you become disabled and can’t work for a period of time. 

Policy name: Return of Premium Term Life.

Coverage amount: $100,000 and up.

Term lengths: 20 or 30 years.

Read the full review: State Farm life insurance review


Best for transparency
insurance-product-card-logo

Cincinnati Insurance

4.0

NerdWallet rating 
Bottom line: Cincinnati Life stands out for giving applicants access to their life insurance underwriter via phone or email, which is a rare offering.

on Nerdwallet

Financial strength rating

Exceptional

Online purchase

No

NAIC complaints

Fewer than expected

Policies offered

Term & permanent
Best for transparency
insurance-product-card-logo

on Nerdwallet

Cincinnati Insurance

4.0

NerdWallet rating 
Bottom line: Cincinnati Life stands out for giving applicants access to their life insurance underwriter via phone or email, which is a rare offering.

Financial strength rating

Exceptional

Online purchase

No

NAIC complaints

Fewer than expected

Policies offered

Term & permanent

Overview: Available in 20-, 25- and 30-year terms, Cincinnati Life’s Termsetter ROP policy can be customized with multiple life insurance riders. These include an accelerated death benefit rider that allows you to tap into your policy’s payout while you’re still alive if you’re diagnosed with a terminal illness, and a child term rider that provides coverage for your kids. You can convert all or part of your coverage to permanent life insurance through the end of your term period or your 70th birthday, whichever comes first. The insurer doesn’t list a maximum coverage level; rather, the amount of coverage you can buy depends on your age and the reason for purchasing a policy.

Typically, underwriters work behind the scenes and don’t communicate with customers directly, but Cincinnati Life connects policyholders with its underwriters via phone and email. This access is helpful if you have questions after you’ve submitted your application. Some ROP applicants are eligible for accelerated underwriting, and the insurer is lenient toward non-cigarette tobacco users when it comes to setting rates.

Policy name: Termsetter ROP.

Coverage amount: $25,000 to a flexible limit.

Term lengths: 20, 25 or 30 years.


Best user-friendly policy
insurance-product-card-logo

Illinois Mutual

3.0

NerdWallet rating 
Bottom line: It’s quick and seamless to get a quote online, and agents are available for follow-up questions.

on Nerdwallet

Financial strength rating

Strong

Online purchase

No

NAIC complaints

Fewer than expected

Policies offered

Term & permanent
Best user-friendly policy
insurance-product-card-logo

on Nerdwallet

Illinois Mutual

3.0

NerdWallet rating 
Bottom line: It’s quick and seamless to get a quote online, and agents are available for follow-up questions.

Financial strength rating

Strong

Online purchase

No

NAIC complaints

Fewer than expected

Policies offered

Term & permanent

Overview: Illinois Mutual’s return-of-premium policy is straightforward. If you’re 18 to 60 years old, you can buy up to $500,000 in coverage, and add an accelerated death benefit rider to your policy. However, the policy isn’t available in Alaska, Hawaii, Montana, New York or the District of Columbia.

Policy name: Path Protector Plus Return of Premium Term.

Coverage amount: $50,000 to $500,000.

Term lengths: 20 or 30 years, or to age 65.


Companies that offer return-of-premium riders

These companies allow you to add a return-of-premium rider to specific policies. You can expect to pay higher premiums if you opt in to this coverage.

Company

Policies eligible for ROP rider

4.5

NerdWallet rating 

20- or 30-year term life insurance.

3.5

NerdWallet rating 

3.0

NerdWallet rating 

15-, 20- or 30-year term life insurance.

How does return-of-premium life insurance work?

When you buy a stand-alone return-of-premium life insurance policy, you’ll select a term length, such as 20 or 30 years. If you die during that time, your life insurance beneficiaries receive the death benefit. But if you don’t, you’ll get a refund of the premiums you paid, without interest — though your insurer might subtract the cost of administrative fees and similar charges. The money you get back isn't taxable, as it’s simply a refund of the payments you made.

To compare, with regular term life insurance, you won’t receive any money if you’re still alive when the policy expires.

ROP life insurance is an interesting product because it’s a term life policy, but it builds cash value over time. Once you’ve accumulated enough cash value, you can borrow against your policy, withdraw the money or surrender the policy for cash if you no longer need coverage.

What’s the catch with return-of-premium life insurance?

The money-back feature comes with a higher price tag. Let’s say you’re a healthy 40-year-old looking to buy a 20-year, $500,000 policy. You can expect to pay nearly five times as much for a return-of-premium policy compared with a standard term life insurance policy without ROP benefits.

Sample rates for return-of-premium life insurance

These are sample rates for a 20-year, $500,000 return-of-premium life insurance policy for super preferred applicants. These are nonsmokers in excellent health.

Age of applicant

Annual rate for men

Annual rate for women

20

$820

$575

30

$865

$580

40

$1,510

$1,290

50

$4,305

$3,470

60

$11,455

$8,725

Source: Quotacy. Rates are for Cincinnati Life and are valid as of November 3, 2023.

ROP life insurance pros and cons

Pros

Cons

Premiums are reimbursed if you outlive the policy.

It’s more expensive than regular term life insurance.

Refunds aren’t taxed as income.

If you’re late paying premiums and your policy lapses, you might not get any money back.

ROP policies can build cash value.

Is return-of-premium life insurance worth it?

It depends on your budget and how you’re fitting life insurance into your overall financial plan.

For most people, a standard term life insurance policy is sufficient. With this approach, you could put the money you don’t spend on a return-of-premium benefit aside into a high-interest savings account, or invest it. 

If you’re not comfortable with the idea of paying into a life insurance policy that may expire, and you can afford the pricey premiums, consider ROP. Just be sure to pay your premiums on time and avoid canceling your policy, as you might not get your money back.

More about top-rated life insurance companies

Looking for a different type of life insurance policy? Check out NerdWallet’s top picks across these categories:

Life insurance ratings methodology

NerdWallet’s life insurance ratings are based on consumer experience, complaint index scores from the National Association of Insurance Commissioners for individual life insurance, and weighted averages of financial strength ratings, which indicate a company’s ability to pay future claims. Within the consumer experience category, we consider ease of communication and website transparency, which looks at the depth of policy details available online. To calculate each insurer’s rating, we adjusted the scores to a curved 5-point scale.

These ratings are a guide, but we encourage you to shop around and compare several insurance quotes to find the best rate for you. NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.

Insurer complaints methodology

NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2020-2022. To assess how insurers compare with one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period. NerdWallet conducts its data analysis and reaches conclusions independently and without the endorsement of the NAIC. Ratios are determined separately for auto, home (including renters and condo) and life insurance.

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