Return of premium life insurance
From Wikipedia, the free encyclopedia
Return of premium life insurance is a type of term life insurance policy. The concept is that the policy returns the premiums you have paid for coverage over that fixed term period if coverage is never used. For instance, a $1 million policy bought for $50000 over a 30 year period would result in the $50000 being refunded to the policyholder.
Critics point to the rate of return being less than in a typical investment, as well as the extra cost of the policy compared to basic term life insurance policies. Also, if the policy is cancelled at any time, no money is refunded.
[edit] External links
- Mark Dodge: Is "Return of Premium" Life Insurance As Good As It Sounds?
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While Mr. Dodge does make a great point about investing your money into an account earning close to 8% interest does earn you more money over time, he isn't factoring in a few things. First, taxes, you will be paying taxes on the interest you earn on any money you invest, so let's cut his figure in half right there. ( Some people will always look at one side of the coin.) Second, how many responsible americans do we know nowadays. With the debt situation the country is in, maybe it isn't the wisest thing to let people control their own money.
