Return of Premium Life Insurance
September 8, 2009 |
Featured
We all pay for health insurance hoping we won’t ever need it. By its very definition, insurance is something that we all hope we don’t ever have to collect on. So after we have paid for many years worth of life insurance premiums, and having “lucked out” for all these years, it is easy to think of all those premium costs as a waste of money.
There is one way of eliminating this problem, which is a form of insurance called Return of Premium. With this form of insurance you are able to collect on it without dying. After paying 20 years worth of life insurance premiums, an individual can get their money back,, and not just part of it like with whole life insurance. With return of premium insurance you get 100% back all of the premiums that you have paid.
The premium costs on these policy vary, depending on what state you live in. They usually cost somewhere between what a term life and whole life policy would cost. Return of Premium has benefits that both term and whole life insurance offer. If is affordable like term life insurance is and has cash value like whole life insurance. You can buy return of premium insurance for time periods ranging from 3 to 30 years.
Most insurance companies will be able to provide you with an estimate within approximately 24 hours. The cost for a return of premium policy is based on your physical condition, age and other habits such as the use of tobacco, which is similar to other forms of insurance.
If you want to make sure that your family is protected, but don’t like the idea of throwing money away to insure your life, then return of premium might be a perfect type of life insurance for you. You will not only get all of your money back when the policy ends, but you also won’t have to pay any income tax on the money that is returned to you.
Return of premium is an ideal form of life insurance for young people who expect that they will go through a lot of changes before they retire. Whether you are single or just beginning a family, return of premium insurance will allow for changes later on in the future.
Even if you end up not keeping your return of premium policy until the end of the term, you are still able to get part of the premiums returned. The longer you keep the policy, the higher percentage that will be returned to you. You will get a small percentage back if you cancel early and 100% back if you do not cancel at all.
You may, on the other hand, wind up wanting to keep your insurance policy at the end of term. Most insurance companies offer continuance terms after the original term ends. Since you will receive a large lump sum of cash, you might want to investment the money into whole life insurance. Whole life insurance policies also have cash value, although it isn’t exactly the same as with return of premium. You will have the ability to borrow money against your insurance policy and still have coverage.
An easy way of insuring yourself without losing your money is through return of premium insurance. It is one way of actually collecting on benefits without the need of really using it.
Contact your insurance agent to discuss whether or not Return of Premium is good for you.
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