Imagine paying life insurance premiums for 20 years straight. Clearly, you haven’t made a claim under the policy and then the company gives you back all those premium you paid in. That’s exactly how return of premium term life insurance works. Interested? Read on.
Many people say that term life insurance is a bet against living. If you die while the policy is in force, you win, and the insurance company pays out. But, if you don’t die, you lose and the insurance company keeps all those premiums you paid to them.
Return of premium term life insurance flips that on its head and makes the policy a win-win for the policyholder. If you die during the term, clearly you win and the company pays out your policy limit.
However, if you live (you’re alive at the end of the policy term) the insurance company gives you back all your premiums!
Let’s say you have 20 years left on your mortgage and you want to make sure its paid off in the event of your death. After the twenty years, the mortgage will be paid for, and you have other life insurance to cover your other needs, so the 20 year policy will no longer be needed.
With a normal 20 year level term policy, at the end of 20 years, the policy cancels and you get nothing.
With a return of premium policy, you get the protection of a possible payout for 20 years, and then if you are alive at the end of the twenty years you get a nice little cash windfall when the insurance company gives you your premiums back.
You pay a little extra to have the return of premium option, but we think it can be a valuable tool in the right circumstances and we’d love to talk to you about it.
About Kevin Panter Insurance
Located in Blue Ridge Georgia, and serving all of Fannin and surrounding counties, Kevin Panter Insurance is one of the leading independent insurance agencies in Northern Georgia. Representing the finest auto and home insurance carriers and the leading business insurance companies, Kevin Panter Insurance can provide you with the best in insurance value.