CONSIDER  "RETURN OF PREMIUM"
(ROP) TERM LIFE INSURANCE

Here's something to consider.  How would you like to get all your term life insurance premiums back when the term of the policy expires?

In recent years, they have added a few new twists to the "Term life insurance" policy.  One of the most interesting additives is (R.O.P.) "Return Of Premium."

Now, before you say, "sign me up", lets go into a few of the details.  First, it works the same as a standard term life policy in the sense that you can purchase policies for a variety of terms, (lengths), 10 - 30 years.  But with an R.O.P. you would get those 10 - 30 years of premium payments back.

So your thinking, "what's the catch?"  And there is a bit of a catch.  R.O.P. term life will cost you around one third more. First, you can only get a full refund of your premiums after the full term has expired.  So, if you out-live your 10 or 20 year policy, you would be eligible to get all your premiums back that you paid in for the full term of the policy.  You can also get a partial return of your premium before the full term of the policy has expired.

For example:  lets say you purchased a 20 year R.O.P. term life policy and you decided to cancel the policy 15 years into the 20 year policy.  You would be eligible for a partial return of your premiums.  If you were 15 years into your 20 year R.O.P. when you canceled, you would get around 50% of your premiums back.  If you were 10 years into the policy, you could expect around 25% of your premiums back.  If it is 5 years or less into the policy, you will most likely not get any of the premiums back.

Now, like we said earlier, R.O.P. term life is around one third more expensive than standard term but, it is around one third less expensive than a permanent life insurance like Whole life.  Here's another example:  Lets say a 40 year old man purchases a 30 year standard term life policy for $50 per month.  Now, after that 30 year term expires, the man would have paid in over the 30 years $18,000. 

And that would be the end of that story. 

He would no longer be insured and the $18,000 spent. Now, 
if this 40 year old man would purchase a 30 year R.O.P. term
life policy, he would have paid in $27,000 over the lifetime of the policy. 

Now the R.O.P. term would have cost the man $300 per
year or a total of $9,000 more over the life of the policy. 
But, with the R.O.P. term policy, he would get all $27,000 he had
paid in over the years.  The down side is that $9,000 could of been invest in a higher yield investment on your own and you would of
made the premiums you paid anyway. So there you have it. 
Yet another choice in life insurance.