The idea behind paying for an insurance policy is to ensure that your family will get money in case you die or get disabled within the contract period. That’s a great benefit, especially since the cost of a regular term insurance policy is very cheap.
Never mind if your chances of collecting are small (insurers make sure you are healthy, and unlikely to die soon, before they approve the plan). You also get nothing if you remain alive when the term expires. But what if you have another option – that of a life insurance policy that enables you to get a full refund of all the premiums that you had paid if you outlive it?
It’s called Return of Premium term insurance. And it has made not a few converts even among staunch insurance non-believers.
Life-and-Death Benefit
Return-of-Premium term life insurance may look attractive but it is expensive – you’ll have to pay from 20% up to 50% more than a regular term insurance plan costs.
The end-of-term payback might also depreciate in value due to inflation after, say, 10 to 30 years. This is the reason why some financial consultants advise that the extra premium be invested instead in other ventures. But then, why go through the stress of looking after an investment when you can simply pay insurance premiums and get everything back when the plan lapses and you’re still alive?
Whatever the pros and cons, it is clear that a Return-of-Payment term insurance plan lets you get a reward in life or in death. This rider if offered on many plans including the mortgage life insurance policy, and some short term life insurance policies as well.
You get two benefits while the plan is in force: You are assured that your family is protected should you die within the term; and you can look forward to a handsome payback should you live.
And don’t worry if the plan is expensive. It only means you will get a bigger paycheck in the end.
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