Our government helps us again! Just as the insurance industry provided a good chunk of the market with what it wants – term insurance with the option to get ALL the money back at the end of term – the government changes the rules. The fallout of the rule change is that return of premium (ROP) term life insurance will cost more than it does right now. The cost increase has caused some carriers to drop the option altogether. In other words, consumers lose.
So, if you’ve been putting off life insurance and you think ROP term life insurance would suit you, ACT NOW -before Dec 29!
What is ROP? Conventional term life insurance offers a death benefit only. It’s like car insurance in that you pay your premium and hope you never use it. Let’s set aside the debate on term life insurance vs permanent life insurance and simply recognize that many people embrace the idea of getting all the premiums back should the insured survive the term (e.g. the 10, 20, or 30 years for which the policy provides the promise of a death benefit). Think of it this way, there can only be ROP if there is no RIP. If the insured goes “RIP” (before the end of the term), there is no ROP.
The insurance company profits by investing the premium. Simplistically, when the insured receives the ROP at the end of the term, the insured’s cost of the insurance was the lost opportunity to invest the same dollars. Not a bad tradeoff for the promise of the death benefit.
Use this ROP opportunity deadline to go get yourself a “Life” with a “money back guarantee” for Christmas this year – your loved ones will appreciate it, so will your bank account!
