Posted: Sat Apr 29, 2006 6:46 am Post subject: A brief about Return Of Premium Life Insurance
RETURN OF PREMIUM LIFE INSURANCE is a form of term life insurance that assures a large sum of money for the insured's family in case he dies within the term, but if he survives then all the premiums paid by him get returned. Its surely one of the best alternatives for a general life insurance policy where in the insured wastes all the money he has paid in the form of premiums, incase he survives through the term. It is one of the newest form of insurances and is offered by a handful of the best insurers in the world.
hi...I'm truly interested about the different forms of insurance which are coming up these days ! But would it be really worthy to invest in such a from of insurance ? How do we justify that this is better than the general life policies ?
Sometime back when this ROP was not available, then a person could have only opted for two types of life insurance-- (i) term insurance and (ii) Cash value insurance. For a Term insurance the premiums would be the same for a said number of years. This seems easy to afford but the insured won't get back any money in case he fails to continue with the policy till the end of the term.
But for a cash value policy there is a guaranteed renewal for the insured's whole life including an investment factor directed to generate cash value. The insured needs to pay a higher premium in order to develope the cash value. The cash value policy could cost around two or three times a term insurance for the same worth of coverage.
Posted: Sat Apr 29, 2006 7:56 am Post subject: It seems too expensive !
hi It really seems good from the above explanations...but what about the cost of such a policy ? how many times more is it gonna cost than a similar general life policy ?
Incase you opt for a 20 year Level Term policy the ROP feature would cost about 30% more. This extra premium which you are supposed to pay would yield a return of 6-7% within this entire period of 20 years and that would be just sufficient to return you all that you have paid in terms of your premium.
How does it work?
If you pay $20 a month into a return of premium term life insurance plan over 30 years (that's $240 a year), you can get back a big chunk of change. You'll receive a check for $6,000 if you outlive the 30 year term of your policy. So, do you feel lucky?
You get the tax deferred savings of the premiums you pay into your life insurance policy. If you wait until the policy expires, you pay no taxes on the return premium you receive.
It's like a savings account that offers you life insurance protection, too. Some return of premium life insurance policies let you take money out early, but penalties usually do apply. _________________ Visit http://www.term-life-online.com to learn how term life insurance works and compare free quotes today.
