People want to know; what is return premium life insurance? Does term life insurance return premium? Is it the same as ROP life insurance? The short answer is return premium term life insurance is an option. It’s what it says it is. Does that make return premium term insurance one of the best life insurance plans?
Would you rather have something that allows access as it becomes available or would you rather have to wait for a specified period of time, such as 10, 20, or 30 years?
As they say, the devil is in the details. The return of premium option works only if you keep the policy until the end. For instance, if the term is 30 years and you cancel the policy in 29 years, you will not receive a return of premium.
The way it works is you pay more for the policy, possibly double.
Insurance companies make most of their money from term insurance. They are designed for people to outlive them. Very few ever pay a death benefit.
The normal cost is kept by the company. The extra cost is invested so when the policy term ends, they have made enough on your money to pay you back.
The question I do not have the answer to is how many people actually keep the policy long enough to get their money back as opposed to those who cancel it with the company keeping the extra cost.
A better way
Doesn’t it make more sense to own something that you have more control of? If you are able to hold it for as long as you want, even for the rest of your life, be more in control of how much you put in, when or if you take money out, and if you decide to cancel it, your chances of receiving something in return are much greater?
That option also exists.
Which do you prefer?
The choice is yours:
1. You can either lease or buy.
2. If you simply lease, the money is gone. You’ll never see it again.
3. However, you can pay rent plus extra for a specified period of time with the promise that if you stay for the duration of the lease, you will get all your money back.
4. Another choice is to buy and own. What you pay will probably be close to what you’d pay for the above option but you control it. You can borrow against it. You can sell it.
Term is cheaper right?
Regular term is always cheaper in the beginning. There are many variables people simply do not take into consideration.
When you ask is it cheaper, do you mean in the short run or the long run?