A return of premium rider is an optional feature added to certain life, disability, or long-term care policies that refunds some or all of the premiums paid if specific conditions are met, such as surviving to the end of the policy term or never using benefits. In term life, a return of premium rider may refund paid premiums at the end of a 20- or 30-year term if the insured is still alive, effectively creating a forced-savings component. The rider significantly increases premiums compared with level term without return of premium. While return of premium riders provide psychological comfort and potential cash recovery, they must be evaluated against alternative uses of the extra premium.

Advisors discuss return of premium riders with clients who dislike the idea of paying for coverage that might never pay a claim. Illustrated comparisons show total premiums, potential refunds, and internal rates of return on the extra cost. Some clients choose return of premium riders as a disciplined savings mechanism tied to protection needs, while others prefer buying lower-cost coverage and investing the difference. Suitability and best-interest conversations address liquidity, opportunity cost, and policy flexibility. Clear explanation of how return of premium riders work-including conditions, timing, and what happens if the policy is changed-helps clients make informed choices.