Return of Premium Life Insurance
We pay for health insurance in high hopes that we’ll never need it. Insurance, by its definition, is something we hope not to collect on. And so after paying years and years of life insurance premiums, and being ‘lucky’ for all those years, it’s easy to feel like it was all just a big waste of money.
Return of Premium Life Insurance, eliminates this problem…because you can collect money without dying. After paying 20 years of life insurance premiums, a person can receive the money they’ve invested back. Not just a portion of it (as with whole life insurance) but return of premium life insurance offers everything back…100% of the premiums you’ve paid.
How Much does Return of Premium Life Insurance Cost?
The premiums for this kind of policy vary from state to state. They generally run between term life policies and whole life policies. Return of Premium Life Insurance has benefits from both of these. It has the affordability of term life and the cash building value of whole life. You can buy it for periods of anywhere from 3 – 30 years.
Most companies can give you an estimate within 24 hours. The cost for return of premium life insurance is based on age, physical conditions, and habits (tobacco use) of the applicant…much like any other kind of life insurance.
Who Needs Return of Premium Life Insurance?
If you want to protect your family, but don’t want to throw away the cash necessary to insure your life, return of premium life insurance is perfect. Not only do you get your money back at the end of the policy’s period, but you won’t have to pay income taxes on that money.
Return of premium life insurance is ideal for someone young who anticipates a lot of change before retirement. Whether you’re just starting a family or still single, it allows for changes in the future.
What Happens if I Want to Cancel My Return of Premium Life Insurance Early?
Even if you don’t keep your return of premium life insurance for the full term, you can still get a portion of your premiums returned to you. The longer you keep it, the higher percentage you’ll get back. Canceling early will give you a small percentage back, and not canceling at all will give you 100% back.
On the other hand, you might want to keep the insurance after the end of the policy’s period. Most companies will offer a continuance term after the original one ends. And since you’ll be receiving a large sum of cash, it might be a good idea to invest it directly into a whole life insurance policy. The whole life insurance policy will also have a cash value, but not quite the same kind as a return of premium life insurance policy. You’ll be able to borrow money against this policy, without loosing the coverage.
Return of premium life insurance is the easiest way to insure yourself without ‘loosing’ money. It’s one of the few ways to collect the benefits, without actually using it.
Talk to your Insurance Agent to ensure Return of Premium is right for you!
By: www.compuquotes.com
Published October 11th, 2007
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