Return of Premium Term Life Insurance

Do you have enough life insurance?  When considering how much life insurance that you need, think about what your family’s needs would be if you or your spouse would pass away today.  Do you want to cover college for the kids?  The cost of a nanny so you could return to work? Pay off the house?  Once you determine the amount, you have a choice of the different kinds of life insurance to use to fund these goals: term insurance or permanent insurance.

When you think of term insurance, you know that it is only temporary and most likely you will live to the end of the term and you will have nothing to show for the money you spent, except you knew that your family was covered.  Term insurance gave you a piece of mind during that timeframe.  When considering term insurance consider a Return of Premium Term product.   For some additional premium you could get a complete refund of premiums paid at the end of the term. 

Lets use an example. Mike a 35 year old male in decent health would like to purchase a $500,000 policy that would protect his family until he retires at age 65.  He needs a 30 year term policy.  The premium for a non-ROP policy is $551 a year. The return of premium product is $1,100.  If Mike buys the ROP product, at the end of 30 years, he will receive $33,000 back.  If he buys the basic term product, he would only have his piece of mind that he covered his family in case of a tragedy (which is still pretty good). 

“Buy term and invest the difference.”  Have you heard people say that?  Is Mike disciplined enough to invest the $549 difference?  In this scenario, Mike would have to take that $549 a year and get a 4% return on it to make a better return than putting it into the ROP product.    In today’s market, you are hard pressed to find a 4% return. 

Do you want to learn more about a ROP Term Insurance product?  Contact Koehler Koehler, Inc. for a quote.