Life insurance that gives you money back

July 12, 2020

I like the sound of that! That's what I thought when I was first introduced to Term life insurance with a return of a premium rider. Don't let the long obscure name confuse you. These policies are designed to provide a guaranteed death benefit for a specified period: typically in 10 to 30-year increments at a locked-in monthly price. Suppose an Individual bought a 30-year term life insurance policy with a $300,000 death benefit and the monthly rate to own that insurance policy is $100 per month. In that case, all of the payments made to the insurance carrier will be refunded during those 30 years when the policy expires. It is truly a fantastic option!

Think about it; life insurance is a protective benefit that shows its worth when a tragedy happens. The most popular/affordable type of life insurance is Term life. Not many people die during the term they pay for insurance (hence the reason it is less expensive than a permanent life insurance plan). The trade-off to this cost savings is that all the money you've paid to your insurance provider over those years is kept by the insurance company when your plan expires.

It's comparable to renting an apartment. When your lease term ends, you don't leave with a rental refund. The great news is that for individuals 60 years of age and under, you can purchase a Life insurance policy with a return of premium so that you will get your hard-earned money back upon the expiry date of your plan. In many cases, this can be a significant lump sum that can be used for whatever you want. A downpayment on the house, that trip to Europe you have always wanted to take, a child's tuition, or whatever your heart desires. This type of policy gives you the protection you need, but should you not pass away or ever file a claim to the insurance carrier, you are rewarded with a partial or full premium refund depending on the carrier you purchase insurance from.

This is not intended to be legal advice. Each state has different laws governing estate planning. Please contact a qualified attorney for further information about Estate planning or schedule a consultation here with one of our partnering professionals.