Title: Return-of-Premium Disability Insurance
Headings: Return-of-premium disability insurance
Return-of-premium disability insurance
How does the return-of-premium rider work?
When the rider pays out
How much the rider pays out
Long-term disability is the best type of disability insurance for most people.
How much does the return-of-premium rider cost?
Why the math doesn’t add up

Content: Why the math doesn’t add up
You may need disability insurance to protect your income, especially if you have major debt obligations like student loans or a mortgage. But you might be better off taking what you’d be spending on the rider and investing it into a savings account. Here’s why: Say you pay $100 per month for a long-term disability insurance plan with a $5,000 per month benefit amount. That same policy could cost as much as $400 per month with a return-of-premium rider that pays out an 80% refund of the premiums you paid every 10 years. At the 10-year mark, you get a $38,400 lump-sum payment, which is a decent chunk of change. But if you were disabled for just eight months during that time – meaning you received $40,000 in disability insurance payments to replace your regular income – then the benefits would more than negate the refund you’d receive from your premiums. In other words, you essentially paid four times the premium for the same amount of coverage. About the author
Zack Sigel
Managing Editor
Zack Sigel is a SEO managing editor at Policygenius. He covers personal finance, comprising mortgages, investing, deposit accounts, and more.