3.13.6 Return of Premium Rider
The return of premium rider provides that if the insured dies within a specific period of time, the payment to the beneficiary will include the sum of previously paid premiums in addition to the policy's face value. The premium payments themselves are not actually being paid to the beneficiary; the policyowner has just provided for the purchase of a term insurance policy that increases as the total amount of premiums paid increases.
A new life insurance policy has been added to the Florida study manual this year. It is called the return of premium (ROP) term life insurance policy. These policies combine the advantages of traditional term life insurance with a return of premium feature. After a specific period of time, 100% of the premiums paid will be returned to the living policyowner.
If the policy is surrendered, however, the insured will only get a portion of the premiums returned - based on a sliding scale (provided the insured has held the policy for a few years). If the insured dies during this term, beneficiaries will receive only the death benefit.
