Return of premium life insurance is a type of
term life insurance
policy. The concept is that the policy returns the
premiums you have paid for coverage over that fixed term
period if coverage is never used. For instance, a $1 million
policy bought for $50000 over a 30 year period would result
in the $50000 being refunded to the policyholder.
Critics point to the rate of return being less than in a typical investment, as well as the extra cost of the policy compared to basic term life insurance policies. Also, if the policy is cancelled at any time, no money is refunded.
External links
- Mark Dodge: Is "Return of Premium" Life Insurance As Good As It Sounds?