What is Return of Premium Term Life Insurance?
If term life insurance is like paying rent or fee for service, return of premium term (ROP term) is like getting your payments back. It’s that simple. Only a handful of life insurers in the market offer this coverage. The only downside is that you are going to pay higher premium for the right to receive a refund. The upside is that you would lose nothing at the end of the term.
How much does Return of Premium term cost?
This 30-year refund of premium illustration shows exactly how the plan works. You also have the conversion privilege to switch your term life into a permanent plan until age 70. Restrictions apply. Just remember, this is not a cash-value policy. There are no dividends that the insurance company shares. It only refunds the premiums you paid into the policy, minus any loans, during the term. Most of these plans come with a free a rider called Accelerated Benefits Rider which allows the policyowner to request a portion of the policy’s face amount if the insured is diagnosed by a physician with a terminal illness that is reasonably expected to result in death within 24 months or has been confined continuously for 90 days in a nursing home and is reasonably expected to remain there for the duration of the insured’s life. The maximum lifetime benefit available is the lesser of 50 percent of the death benefit or $250,000.
Refund of Premium Term Rates
at Preferred Risk
Length of Term: 30
|Return of Premium|
|Return of Premium
As you can see the cost involved in buying a ROP term life insurance is definitely higher than the the traditional term life. So, is it worth it? I think it depends upon your affordability, risk tolerance and individual tax-bracket.
Get real-time Quotes for Life Insurance
Go to SinglePremiumPlans.com and choose the kind of life insurance plan you are looking for. Return of Premium Term plans have ROP in the end.