How can a 'return of premium' rider benefit a policyholder?

The 'return of premium' rider is designed to provide a significant benefit to the policyholder by ensuring that if the insured individual outlives the term of the policy, all the premiums paid during that term are refunded. This feature is particularly attractive to many policyholders because it reduces the perceived risk associated with purchasing a term life insurance policy. If the insured does not pass away during the term, rather than losing the premium payments, the policyholder is essentially reimbursed for what they have paid. This provides a financial safety net and can make it easier for individuals to feel more secure in their investment, knowing that they can recover their costs if they do not need the insurance coverage.

In contrast, other options listed do not align with the core function of a return of premium rider. For example, coverage for accidental death pertains to a different type of rider focused on specific causes of death, while options related to reduced death benefits or increased cash value accumulation are features associated with permanent policies or other riders that do not specifically address the return of premiums paid.