Term life insurance by definition is a short term form of protection and at the end of the term your premiums have been paid for nothing unless you chose a return of premium life insurance policy. With most term life insurance policies unless the policy holder dies their premiums were paid for nothing. While some people will say that the policy can be rolled over into a regular life insurance policy the money still was spent for nothing.
Like any type of life insurance policy you have a few choices to make. How much coverage do you need? How long of a term do you want on the policy? For this question the typical terms available are between 5 and 30 years increasing by 5 year increments. What is your current height and weight? Are you a smoker? How often do you want to pay your premiums? Payment plans can be paid yearly, twice a year, quarterly, or monthly which is the most popular option. Having all of this information close at hand will make it easier for you to get quick policy quotes.
There are many people who say that return of premium life insurance policies are an unwise investment. However most term life insurance policies are purchased as a shot term form of protection of an investment like a home or business. They are typically not used in place of a regular life insurance policy and so it seems unwise to discount them as useless. For instance the typical homeowner’s mortgage is 30 years. So if you purchase a return of premium term life insurance policy of 30 years to cover the cost of the house. For the sake of argument let’s say you pay $50,000 in premiums over the course of those 30 years. Which sounds like a better deal? Having wasted that $50,000 now that the house is paid off after 30 years or getting that $50,000 back now that you don’t need the extra life insurance policy to cover the cost of the house? The reason that many professionals and consumers alike think the policy is a waste of money is because they are treating it like an investment. They will argue that you would make better returns if you used that $50,000 in another form of investment. While this is true that other investment will not protect your family from the debt of a mortgage if you die. That is exactly what a term life insurance policy is a specific form of protection for an investment in case you die. The bonus of term life insurance with return of premium is that if you never have to use it you at least get your initial investment back. That is something you can’t say about other insurance policies that never get used.
If you are in the market for a term life insurance policy for protection take a good hard look at a return of premium life insurance policy. While the yearly premiums can be up to 50% more expensive over a regular term life insurance policy chances are you will get the premium all back in the end. This is just not the case with a standard term life insurance policy where if the policy doesn’t get cashed in you lose the money.
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