274 views

Return of premium life insurance is a type of term life insurance policy that returns the premiums paid for coverage if the insured party survives the policy's term.[1] 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.

If a return of premium policy is viewed as an investment, rates of return are calculated based on the incremental cost above the cost of regular term insurance. A sampling of policies found returns in the range of 2.5 to 9 percent.[1]

Critics point to the rate of return being less than in a typical investment, the extra cost of the policy compared to basic term life insurance policies and that, if the policy is canceled at any time, no money is refunded. Many policies do allow prorated refunds at some point during the life of the policy.

References

^ a b Wiener, Leonard (17 October 2004). "Getting a payback"

. usnews.com. US News and World Report. Retrieved May 21, 2011.

Залишити відповідь

7 visitors online now
7 guests, 0 members
All time: 12686 at 01-05-2016 01:39 am UTC
Max visitors today: 14 at 08:38 am UTC
This month: 62 at 03-12-2017 08:20 pm UTC
This year: 62 at 03-12-2017 08:20 pm UTC
Read previous post:
Indexed life

Indexed universal life is a type of permanent life insurance product. Life insurance products guard against the financial loss caused...

Family income benefit insurance

Family income benefit insurance pays a monthly income if the policyholder dies whilst the policy is in force. The monthly...

Close