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Home > Life Insurance > What is a Return of Premium Life Insurance? What is a Return of Premium Life Insurance?Author: Matt Murren A return of premium life insurance is a type of standard life insurance. It promises to pay you back any premiums that you have paid over a fixed time period if you never use the coverage. The rate of return on this type of policy does not compare favorably to other investments and it is more expensive than standard term life insurance policies. It also is negated if the policy is cancelled at any time. If you keep the policy for the required number of years, you are guaranteed to get all of your money back.These policies are new to the insurance industry and seem to be catching on quite well. Not only do they provide a death benefit but also a promise to pay back any premiums paid. This attracts many people because they feel that they aren't going to die and they will get rewarded for staying alive for a certain number of years. These policies are set up like other term policies, with a time period of 15, 20 or 30 years. If you don't die during this time, the insurance company will refund all of the premiums you have paid over the years. Some, but not all, companies do offer a partial return of premium if the policy is cancelled before the end of the term. Your return is guaranteed with this type of policy and you will get back everything you have paid. However, you will not get back any additional fees such as health charges and disability riders that you may have paid over the years. Another great feature of these policies is that the returned premiums are tax-free because you are only receiving back what you actually paid in. Return of premium life insurance works well for some people because they look at it as an investment and also as a protection for their loved ones. If they choose to receive their premium payments back at the end of the term period, their net cost for the policy will be zero. It is a safe way to save some money for the future, even though the return on investment is low. And, it's important to remember that this type of policy does cost more than a standard term life insurance policy. Some financial advisors suggest that it's better to buy a standard life insurance policy and invest the difference between the premiums into other more lucrative investments. Click here to learn more about the return of premium life insurance - return of premium life insurance. Other Recent Insurance Smart Book Articles:
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