What Do You Meant By Return Of Premium (rop) Term Life Insurance?
Posted August 11, 2009 – 4:24 pm in: term life insuranceIn Term assurance policies Risk is covered during the term of the policy.
Nothing is payable at the end of the selected term if the policy holder survives the term.
There is a feel of ‘paying for nothing’. This makes Term assurance plans less attractive.
In Return of premium term life insurance, Premiums paid during the term of the policy is returned back to the policy holder at the end of the term.
These types of policies has gained acceptability among the insuring public.
4 Comments
Return premium term life insurance is a new type of term life insurance policy that provides both a death benefit and a return of premium feature within the same policy.
It’s easy to understand: If you keep your policy for the full term period, for example 10 or 20 years, at the end of that time the life insurance company that issued the life insurance policy with the return of premium feature returns to you all of the premium that you paid for the insurance policy.
There’s usually some partial return of premium for policies canceled before the end of the term (depending on the year it’s canceled – the longer it’s kept in force, the higher the amount of your return premium).
Unlike regular term life insurance policies, Return of Premium term life insurance rewards you for living by offering a guaranteed return of your total premiums paid on the policy during the level term of the policy.
This return does not include any substandard charges (extra charges for health) and rider charges (extra benefits such as disability coverage), if any, which will be paid to the policy owner at the end of the policy period, if the life insurance policy is still in force at that time.
Here’s an example: Male, age 42 with the best rate of preferred plus, $250,000 of 20-year return of premium term life insurance: Annual premium = $1,000; Return of Premium after 20 years = $20,000 ($1,000 x 20 years = $20,000) The life insurance return of premium is also income Tax Free.
You pay no income taxes on the return premium because you aren’t receiving back more money than you put into the return of premium term life insurance policy.
One major drawback of Return of Premium Term Life Insurance is the fact that this type of policy has much higher premiums than level term life insurance, which is the most popular type of term life insurance purchased.
keys to success online
at
http://expert-emarketing.blogspot.com/
get your doubts clear visit this website http://theinsurancegroup.blogspot.com
look while giving a premium to insurence company they use your certain amount of money in share market and once they gets profits they returns you certain amount of percentage to you after the end of your insurence according to their conditions..