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 Posted: Mon Mar 15, 2010 10:54 am Post subject: Paid-up life insurance - what's it actually? |
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I've opted for an ROP life insurance which shows the cash value ($) and the paid-up value ($) on an yearly basis. I'm not sure of what this paid-up life insurance actually means.
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Tombogal
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| Posted: Mon Mar 15, 2010 12:12 pm Post subject: |
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It's the value of the death benefit you would receive if you wanted to stop paying premiums. They are taking the cash value and buying a policy that is guaranteed for life with no more premiums paid.
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dgoldenz
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| Posted: Tue Mar 16, 2010 10:59 am Post subject: |
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| Please check the terms and conditions of your policy. Also go through the terms listed at the back of your policy papers. ROP life policies are generally term life policies. Your premiums will be paid back once your coverage period ends. |
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steven
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| Posted: Tue Mar 16, 2010 8:13 pm Post subject: |
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| Yes, seems like good advice here. |
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anon3
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| Posted: Wed Mar 17, 2010 2:32 am Post subject: |
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As Steven pointed out ROP generally refers to return of premium term insurance. Some companies will illustrate this form of insurance as having a cash value. It's essentially the surrender value, and by essentially I mean is. ROP term products generally follow some sort of vesting schedule, which is a way of saying you can have the premium back before the policy reaches it's expiration date, but we are going to charge a surrender charge for a little while, which will be deducted from the premiums that we are going to refund to you.
Now this all being said, there shouldn't be a paid up component to your insurance. Unless there is some new quirk to ROP term I'm unaware of. Dgoldenz, I know you are a bigger fan of term like products than I, maybe you can add something to this.
To be clear, paid up life insurance is a deaht benefit promised (guaranteed if you like that word) by the insurance company and requires no additional premium to remain in force.
Usually one does not see mention of paid up insurance unless dealing with certain aspects of Whole Life insurance, or certain structures of Universal Life insurance. |
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BNTRS
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| Posted: Wed Mar 17, 2010 3:03 am Post subject: |
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Some ROP term policies have a paid-up death benefit that you can elect instead of taking the cash value. Some only allow you to take the paid-up benefit after the term is up, some will let you take it earlier as the CV builds.
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dgoldenz
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| Posted: Wed Mar 17, 2010 4:58 am Post subject: |
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| Quote: | | Also go through the terms listed at the back of your policy papers. |
Alternatively, you may contact with the agent and probably he's the right person to give you a proper explanation. Again, you may also choose to mail your concerns to your insurance carrier. Make sure their explanation relates to the policy you have with them, and that they send it in writing. |
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carol
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| Posted: Thu Mar 18, 2010 6:13 am Post subject: |
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Hey! It's actually a non-forfeiture option. The death benefit is reduced, but your beneficiary will receive it even if you stop paying the premiums now.
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sil
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| Posted: Fri Mar 19, 2010 3:17 am Post subject: |
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With some policies the coverage increases as long as you pay your premiums. Once you stop paying the premiums, the coverage stops growing but remains in effect.
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Juanita
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