In a "return of premium" term life insurance policy, what happens if the insured outlives the term?

In a "return of premium" term life insurance policy, if the insured outlives the term, the policyholder receives a refund of the premiums paid. This type of policy is designed to provide coverage for a specific period, and if the insured survives that period, they get back the total amount of premiums they have paid throughout the term.

This feature serves as an incentive for policyholders who may be hesitant about traditional term policies, where they would receive nothing if they outlive the coverage period. The return of premium option typically comes at a higher cost compared to standard term policies, but offers a sense of security that they will not lose their investment if they do not pass away during the term.

Other options do not accurately reflect the nature of a return of premium policy: policyholders do not lose their premiums, the policy does not convert to a whole life policy simply by outliving the term, and there are typically no additional fees required for receiving the premium refund.