Many of our clients want to know about return of premium term life insurance.   It is one of the hottest products on the market and it makes a lot of sense.  Since only about 2% percent of people ever die during the term of their term life policy, why not recoup the premiums at the end.

The argument for it is that the money that you paid for the term premiums will come back to you 100% at the end of the term period.  The argument against it, is that it costs more than regular term insurance does.  In most cases at least 50% more than a regular term policy and often more than that.   The other argument against it, is that you earn no money on the premiums you paid into the policy and only get the money back with no interest.   While I understand this argument, I think it is better to get the money you put in, as opposed to the term policy that expires and you get nothing back.    Return of premium basically serves as a forced savings.  If you didn’t put the money into the policy, would you have saved it otherwise.

The return of premium option generally is more favorable for a younger person as the increase over regular term premiums are smaller than with older consumers.   It never hurts to get a quote for both and weigh them against each other.    Depending on your goals and budget, this may be a great option for you.

Is return of premium term life insurance a ripoff or is it a great deal?  That is a great question and it certainly can be argued both ways.   Return of premium is basically term life insurance that is much more expensive than a regular term policy with the same death benefit.  Usually the premium runs about 50-100 percent higher than regular term.  To collect on the premium return you must live through the entire level term period and then the full premium will be returned.    It seems like a great deal.  It is a great deal, but you must consider a few factors in how good a deal it is.  If you don’t keep the policy for the full term and drop it, you dramatically overpaid for the term insurance.   If you are over 50 the amount you over pay for the term is not nearly as attractive as when you are younger.   The argument against it is that the money returned to you at the end earned no interest and the insurance company held onto your money the whole time and made the spread.

I think overall it is a good deal, since so few death benefits are ever paid on regular term life insurance.  It is important to try and buy the level term period that you are committed to paying for the whole term.   Many of the return of premium plans pay back a percentage of the money paid after a certain number of years.  You may want to look at permanent plans up against the return of premium and compare after 10 and 20 years.

Getting quotes on term life insurance and return of premium (rop) term life insurance is easier than ever.  It is important to make sure that you are getting the quote on the proper type of policy that you are looking for.    Through our quote engine at www.paramountlifeinsurance.com you can fill in your information and get a a quote within a matter of one or two minutes.  For a (rop) quote you can call us at 1-800-554-9142 or to find the most suitable policy we can offer a free consultation.

There are several things that go into selecting a policy and that includes the length of the term, whether you want money back at the end of the term, what company do you want to work with, and what are the conversion options.  If you will keep a 20 year term for only 14 years, then you paid too much and should have selected a 15 year term.   Are you better off getting (rop) or should you do a guaranteed universal life as it will be permanent or do you want to have a whole life plan?   These are the different options and it can seem confusing and that is why we feel it makes sense to get a consultation with one of our licensed agents.  We can help you navigate through the quote process and also be the best estimators of your underwriting rating.   For example, if you receive a quote that is overly optimistic or with a company that underwrites poorly for certain circumstances you could be in for a negative surprise when you apply.