Friday, December 24, 2010

Term Life Insurance which Returns Premiums!

How do you get your money back from a term life insurance policy if you don't die?

Return of Premium (ROP) Riders on Term Life
Most people understand how simple term life works. You buy a policy for a set amount of time. This time period (called the term) may be 1 year or 30 years. But after the policy ends, the contract is over. You are not covered any more, and your term life policy does not build a cash value.

What is there was a way to get your money back if you bought term life? Well, some top insurers offer a return of premium rider on term life policies. Return of Premium Term Life riders are an extra option with an extra cost. But if you survive your policy, which is what we all want to do, you will get a refund of every premium dollar paid. This includes the extra money you spent for the rider.

An Example of ROP at Work

This can be a very handy way to plan for the future. Let us say you spend $30 a month for a $100,000 30 year term policy when you are 32 years old. After 30 years, your contract ends. Now you are 62, and you have spent over $10,000 for coverage you do not have any longer.

But let us say that you chose to spend $35 a month to buy term with an ROP rider. Now you turn 62, and you get back a check for over $12,000! How does that sound?

Learn more about life insurance and get free quotes : Term vs Whole Life Insurance
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