What Is Return Of Premium Life Insurance?
Let's Learn what is return of premium life insurance or money back insurance – if don’t die during your term period; you will receive your all your premium back at the end of your policy term income tax free.
In a most cases term life is a good idea because it gives biggest possible amount of death benefit for the smallest possible premium. For those who can’t afford to do proper risk management with whole life insurance, term life is a big blessing for them and their family. Term life also allows you to acquire right amount of life insurance with very less initially premium compare to permanent.
The biggest problem with term insurance though – is death benefit. According to the Penn State University study conducted in 1993:
- More than 90% term life policies are converted or terminated
- 45% within the first year
- 72% within the third year
- Less than 1 out 10 policies survives the term period they are written for
- After 15 or 20 years of exposure less than 1% of all term policies are still in force or active
- Only 1% of all term policies are resulted in the death claims
So, it means in term insurance you are most like to pay more than you will receive even though premium is very less. The best day to own term insurance is the day you bought. You can get the great return on your term premium if die in first few years of your policy or even you die during your term life period. According to this study, there are 99% chances you will NOT die and therefore will NOT claim the death benefit.
The new return of premium life insurance solves this problem. I am sure we’ll not throw your money in slot machines for 20 or 30 years if the chances of winning are less than 1% (unless you are addicted to slot machine gambling!). So, why throw your premium away on the term life where chances of claiming the death benefit are 1%? Let’s STOP WASTING YOUR MONEY and stat making money. This new money back term life insurance allows you to not to gamble with your family’s future.
This is how this new return of premium plan works – you pay premium for the selected 20 or 30 years of term insurance period. If you die (remember there is only 1% chance!) during this period then your family or beneficiary will get the death benefit. If you don’t die (99% chances) then you will get all your premium back Tax- Free.
Let’s look at an example: John Montgomery is 38 years old, he has two young children and a wife. He wants $1,000,000 term insurance for the next 30 years so in case of his pre-mature death, his children would be taken care of and his wife would not have to work in order to provide for her and the children. Assuming he pays $2000 in annual premium for his new return of premium term life insurance policy. If he dies any time during the next 30 years, his family will get $1 million in death claim but if he outlives his 30 year term life then he will get back his entire premium of $60,000 ($2000 X 30 Years) Tax-Free.
The easiest way to protect your family should you pass away prematurely without ‘losing’ money is a Return of Premium or “Money Back” term life insurance policy. Please call one of our specialists at (877) 972-3262 to determine the right kind of policy for you and for your family’s financial security. We’ll show how to get $30,000, $50,000 even $60,000 check back from the life insurance company. Or get the quote online now.