Return Of Premium Life Insurance in detail
A regular term life insurance policy and a return of premium life insurance policy are similar in that they both cover you for the term you choose and provide death benefits upon your passing.
With a ROP Insurance policy, however, if you survive to the end of the term, you get 100 percent of all the money spent on premiums refunded back to you.
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On the face of it, getting a full refund of your premium at the end of the Insured Term, sounds attractive however, it is important to understand how a Return of Premium (ROP) policy actually works.
To begin with, the premiums that you pay for an ROP policy are substantially higher than in comparison to a standard Term policy. Moreover, each year the premium increases, so the longer the term, the more expensive the policy becomes.
ROP policies can sometimes be purchased as stand alone insurance or alternatively they can form a rider, which is added to a standard term policy.