Understanding Return of Premium Term Life Insurance

Return of Premium Term Life Insurance is a type of life insurance that pays back the premiums you've paid if you outlive the policy term.

This type of insurance is often referred to as a "return of premium" or "ROP" policy.

The policy term is usually 10, 20, or 30 years, and the policy pays out a death benefit if you pass away during that time.

If you outlive the policy term, the insurance company will refund your premiums, minus any fees or charges.

The refund amount is typically the total amount of premiums paid, minus the cost of the insurance coverage.

For example, if you paid $500 per year for 20 years, you could receive a refund of $10,000, minus any fees or charges.

This type of insurance can be a good option for people who want to ensure that their loved ones are taken care of, but also want to save their money in case they outlive the policy term.

Return of premium term life insurance is a type of term life insurance where you lock in a rate for a level term period, such as 10, 20 or 30 years.

Unlike traditional term life, if you outlive an ROP policy, the insurer will refund the premiums you paid. This means you get your money back if you don't need the insurance after the term period ends.

You can use the returned premium for anything you want, such as paying off a car, finishing your basement, or taking a nice vacation.

Return of premium term life insurance is a type of policy that gives you back some or all of the premiums you paid if you outlive your policy. This feature is often added to a regular term life insurance policy, and expect to pay more for it.

If you outlive your coverage, 100% of the money you paid in premiums during the term is returned to you, tax-free. This is a significant advantage, especially if you're looking to save for long-term goals or pay off debts.

A return of premium feature is also sometimes available on types of permanent life insurance. For example, Nationwide offers a return of premium rider on one of its universal life insurance policies.

The annual premium payable for a term plan with return of premium can be quite high, such as Rs. 12,718 for a 30-year-old man looking to secure coverage for himself. This is because the policy pays out a maturity benefit if the policyholder survives the policy term.

There are two ways to get a return of your premium: As an ROP term life policy or as an ROP rider. You can also calculate your premium payable using an online premium calculator, which can give you a better idea of the costs involved.

If you fail to make your payments or cancel the policy, you may not get a premium refund (exact rules vary by insurer). It's essential to carefully review the terms and conditions of your policy before signing up.

Here's a summary of the key takeaways:

There are various types of ROP policies available in the market. Some of these policies offer coverage for 15-, 20- or 30-year terms, with $100,000 and up in coverage.

For example, AAA Life Insurance offers ROP policies with these term options and coverage amounts. Cincinnati Life also offers a Termsetter ROP policy with level term periods of 20, 25 or 30 years.

Here are some examples of ROP policies from different insurance companies:

Limited Pay is a premium payment option for ROP policies that allows you to pay off the premiums for a fixed number of instalments.

You can choose to pay the premiums for a fixed number of instalments under the limited pay option for TROP. This option can be a good choice if you have a limited budget or prefer to pay premiums in a lump sum.

The limited pay option can be used to pay premiums until the age of 60 years, while the plan extends till 85 years of age. This means you can enjoy the benefits of the ROP policy for a longer period.

Here's a summary of the limited pay option:

There are different types of ROP policies, and understanding them can help you make an informed decision.

A traditional term life insurance policy may give you an option of 15, 20 or 30 years with a fixed annual premium, but you can outlive the policy and do not get any money.

ROP policies can be categorized into two main types: ROP term life policies and ROP riders.

ROP term life policies give you back some or all of the premiums you paid if you outlive your policy, this tends to be more expensive so you have to weigh the pros and cons.

ROP riders, on the other hand, can be added to a traditional term life insurance policy to give you a return of premium feature.

As you age past 50, ROP policies are less easy to find.

Here are some examples of ROP policies with their features: