Return of Premium- Get the Best of Both Life Insurance Policies by Giving Some and Taking More.

2007-03-08 10:33:40

( Insurance )



What is insurance and what is it for?

Insurance is a means of protection. It protects you from potentially unexpected future losses by giving you monetary compensation in exchange for a periodic payment, which is more commonly known as premium. There are different kinds of insurance policies and premiums like auto insurance premium, health insurance premium, disability insurance premium, business insurance premium, and life insurance premium.

Other Kinds of Life Insurance Policies

1. Term Insurance
· In this type of insurance, you pay a premium for a specific and fixed period. If incase you die during that period, your selected beneficiaries will get the value of your life insurance. But, if you outlive that period, you won’t get anything and your policy will be closed.

2. Permanent Insurance
· This insurance covers your entire life and you can build up your cash value and get death benefits at the same time. But, this also means paying higher premiums. The different types of permanent insurance are whole, universal, variable, and survivorship.

Return of Premium and its Advantages

Return of Premium is the middle ground of life insurance policies, between term and permanent. So, you can also say that Return of Premium is the best of both worlds. It’s basically similar to standard term insurance except for the fact that if you die during the said period, your beneficiaries will get a lump sum of money, and if you outlive your term, you’ll get your money back. You can also surrender your policy during the term and receive a portion of the premium, unless you surrender it within the first five years. When it comes to the price, Return of Premium still stands in the middle; it costs more than term insurance but much less than permanent insurance.

The main purpose of getting a life insurance is to financially protect your dependents, but if you can get a little bit more, then why not?


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