Colorado Life Producer License Practice Test

Which type of insurance policy would typically include a ROP rider?

1. Whole life insurance

2. Universal life insurance

3. Increasing term insurance

4. Term insurance

The correct answer is: Increasing term insurance

A Return of Premium (ROP) rider is generally associated with term insurance policies. This rider provides a unique feature where if the insured survives the term of the policy, the premiums paid are returned to the policyholder. This makes term insurance appealing because it combines the affordability of a standard term policy with the added benefit of receiving a payout if the policyholder outlives the coverage period. Although whole life and universal life insurance have their own benefits, they primarily focus on providing death benefits and cash value accumulation rather than the ROP feature. Increasing term insurance, on the other hand, involves a death benefit that increases over time, but it typically does not include a return of premium provision, thus differentiating it from the standard term insurance with ROP. Therefore, the most appropriate policy that includes a ROP rider is term insurance.