Return of premium term is a type of term life insurance policy that returns some or all of the premiums paid if the insured survives to the end of the level term period and the policy is kept in force. During the term, it functions like traditional term coverage, providing a death benefit only if the insured dies. Premiums are higher than for comparable level term without refund because the insurer is effectively bundling pure insurance with a refund or savings feature. At the end of the term, the policyowner typically receives a lump-sum refund of paid premiums, which may be tax-free if they do not exceed total premiums contributed.

Advisors recommend return of premium term for clients who need temporary coverage but strongly dislike the idea of "wasting" premiums if they live. Illustrations compare long-term cost, refund amounts, and internal rates of return, often alongside a strategy of buying lower-cost term and investing the difference separately. Suitability analysis considers cash flow, investment discipline, and whether the client is likely to keep the policy in force to term. If the policy is surrendered early or coverage needs change, the economics of return of premium term can be less favorable. Clear discussions help clients weigh behavioral benefits against flexibility and alternative uses of capital.