Life Insurance
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RETURN OF PREMIUM LIFE INSURANCE
Life Insurance has never been the most fun thing to shop for. The thought of dying isn't exactly what you want to think about, especially when you're spending money on something. However, Life insurance is vital in the protection of your family and/or assets if something was to happen.
Now there is a new type of Life Insurance that actually Rewards you for Living. This insurance is called Return of Premium. This allows you to get all the money you spent during the term of the Life insurance policy back, TAX-FREE!
Return of Premium is an Innovative Solution
Return-of-Premium life insurance addresses one of the consumer's greatest objections to term life insurance: "I'm probably not going to die, and my money will have been wasted." With level term life insurance, you pay the same premium over a fixed number of years. It's very affordable life insurance protection, but you get nothing if you outlive the policy.
Unlike regular level term policies, Return of Premium term life insurance rewards you for living. The cumulative premiums paid on the ROP policy during the level term period (not including substandard and rider charges) will be paid to the policyowner at the end of the level term period if the policy is then in force. In other words, if you pay your premiums and you live, the insurance company will give you your money back
How does Return of Premium Work?
Here's an example: 35-year-old Male (Preferred Plus rate class) for $500,000 of 30-year Return of Premium term life insurance:
Annual premium = $810.00
Total 30-year outlay = $24,300 ($810 x 30yrs = $24,300)
Return of Premium after 30 years = $24,300
On a typical 30-year Return of Premium policy you pay about 30% more than for a regular term policy. Usually, the 30-year ROP is priced better than the 15 or 20 year policies, because it gives the insurance company more time to invest your money.
There also is some partial return of premium for ROP policies canceled before the end of the term (depending on the year cancelled - the longer the policy is kept, the greater the amount of the return.)
The return of premium is Tax Free income, because you are not receiving back more than you put into the Return of Premium policy.
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