Has Return of Premium Life Insurance (ROP) Come to Stay?

Life insurance is a gamble. If you die, your family benefits, but of course, you don't want to die! If you do not die, you are out all of the premiums you paid! Not with return of premium life
insurance! With return of premium term life insurance, you are no longer risking losing all of
those monthly premiums that you pay!
What is Return of Premium Life Insurance?
Return of premium life insurance is a type of term life insurance with return of premiums paid throughout the policy term. Like other forms of life insurance, if you die during the term of the policy, your family will receive the lump sum benefit of the policy. If, however, you live and the policy comes to term, you are repaid for all of the premiums that you paid!
How Is ROP Different
Return of premium life insurance is different than other types of term life insurance. Return of premium competes with the two other main types of life insurance: whole life and term life insurance. Whole life is insurance that you pay for your entire life, with no limit. This is an expensive form of life insurance. Term life insurance is life insurance that you pay for a set period of time, usually twenty to thirty years. The premiums on term life insurance are usually much lower, since many of the customers using term life insurance do not die during the term.

Return of premium term life insurance is an innovative way to combat the most common reason that people do not choose to buy life insurance. Most consumers who choose not to buy life insurance do so because they assume they are not going to die during the term, and therefore they will waste their money on the premiums. With ROP, that excuse is no longer valid! If you do not die, and keep your policy with the company the entire time, you are repaid the premium amounts. This is a great way to force yourself to start saving!
Features of ROP
ROP life insurance works much like other types of life insurance. If you die while you are a policy holder, your beneficiaries, usually your family, receives a lump sum, valued at whatever the value of the policy is. If you do not die, at the end of the term, you are repaid the premiums, provided you keep your life insurance with the company the entire term of the policy.
Cost of ROP Life Insurance
Return of Premium life insurance does cost more than regular term life insurance, since the company will be paying you back at the end of the term. But, most customers who use return of premium life insurance feel that the extra expense is worth it, because if they live through the term of the policy, they are not out anything. And the added cost is usually only a few dollars a month, which is well worth the investment. The typical difference between return of premium insurance and traditional term insurance is 30%.
How it Works
The reason that the life insurance company will be able to repay their return of premium clients their premiums at the end of the term is that they are investing the premiums during the policy term. Each time you pay your monthly premium, it gets invested, bringing income into the company. Also, many people choose to take their business to another company before the term is up. When this happens, they do not receive their premiums back. That money, as well as the money from investments, is now available to pay you back for your premiums.