What does a return of premium rider provide?

The return of premium rider is a feature in certain insurance policies that offers a refund of the premiums paid if the insured dies during the term of the policy. This rider is designed to provide additional peace of mind to policyholders, ensuring that if the insured passes away before the end of the policy term, the premiums they've paid will be returned to their beneficiaries or the estate. This means that not only does the policy serve the primary purpose of providing a death benefit, but it also offers a financial safeguard for the policyholder's investment in the policy.

In considering the other choices, they describe features that do not accurately represent the function of a return of premium rider. For example, while higher benefits for the policyholder who survives until the end of the term is more characteristic of a different rider or option, it does not reflect the primary purpose of the return of premium rider. Similarly, the notion of a fixed bonus would pertain to different types of insurance policies often involving cash value accumulation, which isn’t part of the return of premium structure. Lastly, a reduction in premiums is not typically linked with a return of premium rider but may be seen in other adjustments related to individual policy terms or certain loyalty programs.