Protecting our loved ones from financial hardships when we can’t be there for them anymore is the main reason why we get a life insurance policy. But what if you only need to protect them from long term expenses such as the mortgage, a home equity loan or your children’s education? A return-of-premium-life insurance assures that you will get your money back if you outlive your policy term. This type of insurance guarantees that you’d be able to give your loved ones the financial protection they need.
A return-of-premium-life insurance (ROP) offers a level premium payment term of 20-30 years. If you pass away during that period, your loved ones will still be able receive the death benefit but if you outlive your policy, you would get all of the policy premiums you’ve paid back at the end of the term.
But of course, everything has a price. You’d have to pay more for this money-back feature. It would usually be around 30%-60% than the regular term life policy with the same coverage. It’s a good idea to consider how much you can possibly gain first by buying the regular term life policy and just saving the difference. Another thing to consider is you won’t be able to gain an interest on your money with this kind of insurance policy.
Other things to consider:
Just like regular term life policies, you can convert term to a whole life insurance policy with a return-of-premium policy. It may be going to be more expensive but it is a convenient way to keep your coverage if you decide that you’d want a permanent policy later on.
Each one of us is different, and everyone is going to need a different coverage based on their family needs. A return-of-premium-life insurance policy may or may not be right for you. As most of the time, an ROP isn’t really the best choice especially if you want to save a lot of money. If you have any questions about return-of-premium-life insurance coverage or other options that may be available to you, talk to us.
At Jonathan Leonard Insurance, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. To learn more about how we can help you, please contact our agency at (302) 887-9025 or Click Here to request a free quote.
But of course, everything has a price. You’d have to pay more for this money-back feature. It would usually be around 30%-60% than the regular term life policy with the same coverage. It’s a good idea to consider how much you can possibly gain first by buying the regular term life policy and just saving the difference. Another thing to consider is you won’t be able to gain an interest on your money with this kind of insurance policy.
Other things to consider:
- Depending on the policy, you may or may not be able to get your money back if you cancel or stop paying your policy before the end of its term.
- There may be a minimum amount of coverage that you have to buy. For example, $120,000.
- Return-of-premium-life insurance is usually added as a rider to a term life policy.
Just like regular term life policies, you can convert term to a whole life insurance policy with a return-of-premium policy. It may be going to be more expensive but it is a convenient way to keep your coverage if you decide that you’d want a permanent policy later on.
Each one of us is different, and everyone is going to need a different coverage based on their family needs. A return-of-premium-life insurance policy may or may not be right for you. As most of the time, an ROP isn’t really the best choice especially if you want to save a lot of money. If you have any questions about return-of-premium-life insurance coverage or other options that may be available to you, talk to us.
At Jonathan Leonard Insurance, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. To learn more about how we can help you, please contact our agency at (302) 887-9025 or Click Here to request a free quote.
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