More Life Insurance Artitcles

Best Term Life Insurance Quote – How to Get Yours Today
In today’s world, there are so many choices. How do you plan to get places – in your mom’s old beat up station wagon that needs major repairs, or in a brand new sports car? Now that you have your Bachelors Degree are you going to enter the...Read More

How to Cut Your Life Insurance Premiums Without Changing Insurance Company
Life insurance could be even cheaper if you change how you pay the premiums. Most policyholders pay their premiums monthly but many life insurance companies give customers who choose to pay their premiums annually a discount. Cheaper Premiums or...Read More

Never Underestimate The Importance of Life Insurance
For those of you who think that life insurance isn’t important, or that you can "do it tomorrow", I have a tale to tell. I have to preface this by telling you that in August of 1983, my family took a vacation. We went to visit my aunt who at that...Read More

The Cash Value Of Life Insurance
The study of the human history and civilization reveals a universal desire for security, and it indicates that the need for security has been one of the most powerful motivating forces in the material and cultural growth. Early societes relied on...Read More

Life Insurance No Medical Exam Is It Really Possible

Life Insurance 66 Of Applicants Face Loaded Premiums

Veteran Universal Life Insurance What Is It And What Are The Advantages

Why You Should Be Buying Last To Die Life Insurance

Getting Life Insurance Advice

Term Life Insurance That May Pay Back Your Premiums

"Would you like to buy term life insurance that pays back the premiums you paid over the life of the policy?

Many people would love that deal. Perhaps they can't afford permanent life insurance with its investment component, or they hate "wasting" their premium dollars on term insurance for which they'll likely never collect any death benefits because most don't keep it late in life because it becomes so expensive.

In recent years, insurance companies have promoted a concept called return-of-premium term life insurance, which pays back in a lump sum all the premium dollars insureds pay into their policy as long as they keep the policy for its full term. It sounds like a good deal, but some financial planners and insurance experts express caution.

Say you need a $500,000 term policy for the next 30 years. A regular term policy with an insurer rated A+ would cost a nonsmoking male, qualifying for preferred plus, around $410 annually, according to quotes provided by the online insurance broker AccuQuote. If you lived to the end of the term, you would have shelled out $12,300 in premiums, and the policy's death benefits would not have been paid out.

A comparable return-of-premium term policy would cost $605 a year, according to AccuQuote. If you keep the policy in force the full 30 years, you'd get back all $18,150-tax free-the you paid in premiums. Or looked at in another way, for the $5,850 you paid in extra premiums, you'd get back the $12,300 in premiums you wouldn't have gotten back at all if you'd bought the regular term.

For some needing insurance, this can be a good deal. But there are some catches. The first, of course, is whether you can realistically afford the higher premiums. For our example, the annual

premiums for the return-of-premium policy are 47 percent higher than the premiums for the standard term policy.

That difference jumps dramatically the shorter the term. A $500,000 standard term policy for 15 years would cost $210 a year-but $1,035 for an ROP policy, according to AccuQuote. That's five times the cost! (ROP premiums are higher, the shorter the term, because the company has fewer years to earn the money necessary to pay back the premiums plus cover costs and profit.)

The differences are larger the older you are when you take out the policy. A 40-year-old who wants 15 years of $500,000 coverage would pay $285 for a standard term policy, but six times that-$1,715-for ROP coverage.

Yet most financial planners strongly recommend that the first priority for life insurance is to have sufficient coverage. If you can't realistically afford ROP coverage for the amount you need, but you can for regular term, you probably should go with the regular term. You also don't want the higher ROP premiums derailing contributions to retirement plans or excluding other insurance needs such as disability coverage.

Even assuming you can afford ROP, there is the question of whether you'll actually keep the policy for the full term. A few companies will refund a portion of your premiums if you drop the policy before the term is up, but it's not a large portion. And if you surrender the policy in its early years, you might receive no refund at all and even pay surrender charges.

Historically, holders of term insurance keep their policies for an average of only eight or nine years before they either drop coverage or switch policies. Yet over 20 or 30 years, you might go through some difficult financial times and be forced to drop the steeper-priced ROP policy.

Some critics of these policies argue that people would be better off buying a cheaper standard term policy and investing the difference that would have gone to ROP premiums, particularly if they can invest in a tax-deferred retirement account.

Proponents counter that many people are not disciplined enough to consistently and wisely invest the difference. They claim you'd have to earn six to eight percent annually to accumulate an amount equal to the amount of the return of premium. Furthermore, that invested amount will eventually be taxed, unlike the ROP refund.

Regardless, before plunging into a return-of-premium policy, talk with your financial planner to see what is really the best option for you.

About the Author : Noyescapital Source: www.isnare.com

Written by: Noyescapital

Life insurance the universe and everything

Protection Mode or Giving Mode Why People Buy Life Insurance

Save Money on Life Insurance

Tips for Purchasing Cheap Term Life Insurance

Whole Life Insurance Explanation What Is It

Getting A Life Insurance Quote Online Q amp A

Life Insurance Why Does The UK Have A 2 3 Trillion Protection Gap

Life Insurance and Critical Illness Insurance. Cancer Tests To Increase Women's Premiums
Ladies, if your mother or any other female blood-line relatives have a history of breast or ovarian cancer then from next year onwards, you could face higher insurance premiums. You could even be refused cover altogether. When these women apply...Read More

Life Insurance - The Basics
Life insurance is purchased in order for you're dependents to be looked after financially in case of you're death. If you are single and have no dependents, it would probably be wise not to waste you're money on life insurance, and use it to...Read More

The 5 Year Term Life Insurance Policy Or Rider
5 year term life insurance has been around in insurance circles for a very long time. It can be sold as a policy or as a rider to a permanent life insurance policy. It was never promoted much by life insurance agents perhaps because of it's ...Read More

The Life Insurance Quote Business is Booming, but is the Insurance Quote Accurate?
The life insurance quote business online is booming. Not only are life insurance agents quoting a more diverse portfolio of companies, but consumers are also now able to quote life insurance online for themselves. In this article, I will analyze...Read More

Understanding the Importance of Mortgage Protection Life Insurance
Your house is a big investment – probably one of the biggest you’re every likely to make. It is also the place that you and your loved ones call home; a shelter and haven from the outside world. That’s why it is so important to ensure that your...Read More

Best Life Insurance Quote - How To Recognize It
Rates cannot determine all The bottom line when it comes to insurance is not the rate. Most rates are incredibly competitive when all of the factors are included. Anyway, what good is a low rate if the company that you are paying a low rate...Read More

Term Life Insurance: Find Cheap Quotes and Best Plan in One Package
Term life insurance is a relatively easy to understand concept. Term life insurance policies stay in effect for a predetermined length of time (the term). During the term of the policy, the insured pays a regular premium. If, at any time during...Read More

Universal Life Insurance Policy Longevity
What is Universal Life Insurance and how do I get the best Universal Life Insurance Quote? Universal Life Insurance or "UL" as it is commonly referred to in the insurance industry is a relatively new concept. It is a permanent version of life...Read More

Variable Life Insurance: Risks and Benefits
One of the most popular forms of life insurance is the variable life insurance policy. With variable life, one gets permanent insurance (like whole) along with the opportunity to isolate specific investment opportunities at which premiums are ...Read More

Family Security Life insurance policies

What s the Difference Between Whole and Term Life Insurance

Term Life Insurance Rates

Advantages of Whole Life Insurance Is It Better Than Term Life Insurance

Term Or Whole Life Insurance Which Is Right For You

More Life Insurance Artitcles