What is Term Life Insurance?
Term life insurance is life insurance that provides coverage at a fixed rate of payments for a limited period of time. It has a specific expiration date generally in 10, 20 and 30-year increments. Normally that would be the end of the policy. But savvy insurance buyers will opt for a Return of Premium Term Life insurance.
What is a Return of Premium or ROP?
Return of premium (ROP) is a type of life insurance policy that returns the premiums paid for coverage if the insured party survives the policy’s term, or includes a portion of the premiums paid to the beneficiary upon the death of the insured. For example, a $1,000,000 policy bought for $10,000 a year over a 30-year period would result in $300,000 being refunded to the surviving policyholder at the end of the 30 years. So, the premiums that you pay into it, whether they’re monthly or quarterly, you will get all of the money back at the end of the term. It’s a win-win!
It’s always a little morbid subject when talking about with life insurance, but it’s basically a win-win because, during that policy, you’re covered for a large amount. If you survive the term which is what everyone’s rooting for at the end of the term; they send you a check for every penny you’ve ever paid into it. So term with return of premium does cost more than without the return of premium. But it pays dividends in the long run.
So it’s basic common sense to opt for the Return of Premium. It’ss important to understand that you do get every single penny back, so it’s a wonderful thing if you can afford it. It is a fantastic way to go.
If you are located in the Cottonwood, Sedona, Flagstaff or Prescott area and are looking for more information on affordable Life Insurance please don’t hesitate to contact us. Use the links below or call us directly at (928) 323-0933.