Term Life Insurance That Pays You For Living: Return Of Premium

Return of Premium (commonly known as ROP) policies, while a bit more costly, offer the benefit of returning your paid premiums if you are still living when the policy term is up. They also provide the same benefits of a term life insurance policy; namely offering you the choice of your term length and policy amount.

ROP Policies Pay You for Outliving your Term Life Insurance

Originally, ROP term life insurance was designed only to refund the policyholder at the end of the chosen term (for example, 20 or 30 years) if the policyholder outlived the term. As the product has matured, there are now several variations which allow policyholders to receive partial refunds by canceling the policy several years into the term.

How a ROP Insurance Policy Works

For example, if a policyholder chose a 20-year ROP product, they may be able to receive a 50% refund of paid premiums at the end of the 15th policy year. Graduated refunds may be able to be received down to the sixth policy year; no refunds will be returned if the policy is cancelled before the end of the fifth policy year.

Affordability of ROP Life Insurance Policies

ROP term life insurance offers consumers options. Price-wise, it usually falls in the middle of less expensive pure term life insurance products, and more expensive (and often confusing) permanent or whole life insurance products. It offers the same benefits as traditional term life insurance, while offering consumers the added bonus of getting their paid premiums returned to them if they outlive their policies; or receiving partial returns if they find they have a greater need for the money partially through the policy's term.

As with any life insurance product, it is important to make sure your loved ones will be financially covered in the event of your passing. Taking time to update your coverage will ensure that you won't leave your family in financial troubles.