You might have heard of the term Return of premium (or ROP) life insurance. It’s an addition to a term life insurance policy that provides a return of premiums paid by the policy holder. At the end of the term, the owner of the life insurance policy receives the full amount of premiums paid during the term. Return of Premium Term is very appealing to some policy holders because of its guaranteed pay-out feature. If you die, your family receives a lump sum of money. But if you live through the term, the insurance company promises to return all of your premiums. Of course, the cost of Return of Premium Term policies is higher than for a regular term policy. Also, if you decide to cancel your policy before the end of the term, you won’t get the entire return of premium you’ve put in. Premiums are returned on a sliding scale that builds up to 100 percent at the end of the term. So, for example, if you cancel a 20-year policy, at year 15, you can expect to get back only about 50 percent of your money.

This entry was posted on Monday, September 29th, 2008 at 11:42 am and is filed under General, Life Insurance Policy, Pointers, Tips. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.