Eat your cake and have it too!

Imagine you bought a term life insurance policy for 15 years when you were 25. 15 years and 180 premium payments later, your policy expired. And because you didn’t die, thankfully; you don’t get the death benefits coverage. And that’s when you start calculating. If only you could get all that money paid over 15 long years, back.

Return of Premium Life Insurance is the blissful answer to such situations. It gives you excellent death benefits coverage but also helps you save all that money in case you outlive your policy term. In short, it works like a savings plan where either your beneficiaries get the payout or you get a refund and enjoy it for the rest of your life.

How it Works

Regular term life insurance policies are term-based and when the term expires, companies can keep all that money without having to pay out the death benefits. In the case of Return of Premium Policies, the premium or a part of it is refunded to you. To keep the policy in force, you shall however be charged a little bit extra as a cover charge for operations and processing.

 

Policy Highlights

Pros

  • Perfect blend of insurance and savings
  • Financial security
  • Refund is non-taxable

 

 

Cons

  • More expensive than a regular term of life insurance policy
  • Return of premium only pays back the paid-up amount and not any interest.
  • Considering the inflation factor, the premium amount when refunded after a long term, may not have the same purchasing power it had when you paid it.

 

Duration

The Duration of Return of Payment Life Insurance policy is the same as Term Life Insurance Policy.

Is Return of Premium a Good Choice?

For anyone who lacks money-saving skills, this may be a good fit. But it is more expensive than regular insurance. So for those who are meticulous and smart in investing, buying a regular term of life insurance, and investing the difference in other ventures is also a good option. But ROP returns will be non-taxable and hassle-free.

Policy Affordability

This type of policy may not be the cheapest one, however, it will not be outrageously priced. The thing is, when companies return all your premium payments, in the end, they have to charge you something extra because otherwise, they will not be able to cover operational costs. Your monthly premium is set depending on your age, term, and the coverage amount.

If you are still not sure, call us for a professional assessment and we shall see what fits your situation best.