subject: Pros And Cons Of Rop Term Life [print this page] Term life insurance policies are usually very affordable. The drawback is that you may make your payments for months, or even years, and then have nothing to show for it at the end of the term. Term policies are temporary, and that is why they cost less than other forms of coverage.
There are advantages and disadvantages of term life insurance. Term is usually cheaper. You will be investing in a temporay solution. At the end, you will not have your life covered, and the policy will have no value. You have to understand how different policies really work before you make a decision.
You may also choose another variety of term life. Many policies have a return of premium (ROP) rider. The option will cost more, but it also provides you with a nice benefit. You have to keep your policy in force for the whole term. Of course, you cannot make a claim either..
An option to get your premiums refunded, if you survive, may be a nice alternative. You still pay your premiums, but you get the money back at the end. Consider some of the pros and cons of return of premium life insurance before you decide which type of life insurance policy is the right one for you.
Consider an example. Say a thirty year policy costs fifty dollars a month. This will be six hundred dollars a year. Over 30 years, you will pay out $18,000. Of course, you hope to outlive your term coverage. But your coverage will end, and you will not have any value left in your policy.
You might decide to add the return of premium rider. Let us say it costs an extra five dollars a month.00 a month, you could get a nice refund check at the end of your policy term. So, if you follow the example, your premiums will rise to fifty-five dollars a month. This means you will spend over nineteen thousand over thirty years. Of course, in this case, you get all of your money refunded at the end!
Return of premium life insurance is not the ideal solution for every person. This option can give you a great solution. You get a substantial refund at the end of your policy term. You could use that money for anything you want. You may even choose to purchase a small whole life policy for your retirement.
by: Marilyn Katz
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