When looking at purchasing return of premium term life insurance, you should compare the difference in cost between return of premium and regular term life insurance.  You will find that there is a much greater difference in the cost between the two as one approaches older ages.  That being said, there is still a significant difference in cost between the two.

For example, a healthy 25 year old, non-smoking  male will pay as low as $360 annually for a 30 year level-term policy from an A-rated company.  He will pay as low as $625 for a 30 year return of premium policy, about 75% higher than a level term.  Why would someone pay this much more for this type of policy?  Simple math will tell you that at the end of the 30 years, if you survive the policy (which is a good thing), you will be out of pocket $10,800 for the term policy.  On the other hand, if this same person had purchased this regular term policy, he would have received $18,750 at the end of the term.

But you say you could purchase the term and invest the difference ($265 annually) and do better than this?  Maybe you can, but you would have to earn 5.08% annually to beat these numbers.  Do you have confidence you can earn that much on your investment, especially in these uncertain financial times.

Now, as you get older, the difference in cost between the two is greater, so you would have to evaluate whether or not it makes financial sense for your situation.  For example, a healthy, non-smoking 40 year old male would pay as low as $621 for a 30 year level term insurance policy, whereas he would pay as low as $1370 for a 30 year return of premium term life insurance policy.  If you purchased term and invested the difference ($749), you would have to earn 3.65% annually to get back the same $41,100 you would have gotten back from the return of premium policy after 30 years.

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