Additional Types of Life Insurance Tips

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What is return of premium life insurance?

Return of Premium Life Insurance Tips

If you are in the market for a life insurance policy you should be aware that there are additional benefits you can add to your policy to enhance the benefit. Return of premium riders are one such option.

The Return of Premium rider is a particularly attractive option for consumers because it ensures that you will get all your premium dollars back if you do not die during the term of your life insurance.

Policy holders pay annual premiums throughout the policy term (usually between 15 -30 years). The sum total of all payments is returned to the policy holder at the end of the term unless a death benefit is paid out (ask your life insurance company what happens to the additional premium if death does occur)

Policy payments do not earn interest but, since they are paid with after tax dollars, their repayment is not a taxable event.

How can return of premium life insurance protect my future?

Tips on Return of Premium Life Insurance

Don't want to pay on something you won't use? Return of premium life insurance is probably for you. Read on for tips about why this type of policy is gaining in popularity.

Return of Premium Life Insurance (ROP term) Offers Extra Incentive to Save

  • With a ROP Term, the question isn't simply, can I afford to commit a portion of my earnings to a long-term savings plan? Rather, it becomes can I afford not to protect my family financially if I am no longer living?
  • ROP term offers extra incentive to save by:
    • Rewarding policy holders that hold onto their policies (and their lives) throughout the term.
    • Providing a savings vehicle that offers two significant benefits – financial security for the policy holder's family in the event of death or return of premium to the policy holder.
    • Policy holders cannot lose with return of premium insurance because it is an investment in his/her family and future.
Your return of premium payment can be used for any purpose, particularly as life expectancy continues to climb, ROP term policy holders can look to them as funding for the dreams of their golden years. Feeling disheartened by the underlying implication of life insurance? Return of premium insurance can help you rethink the purpose of your payments. Knowing that they will be returned can help you think of the payments as contributions to your world travel fund instead.

What are the things to consider when considering life insurance?

Tips for Choosing Life Insurance

There are many different types of life insurance. No matter your age or life stage, there is a plan that's just right for you. When you are considering what kind and how much life insurance is appropriate for your family, there are several things to consider.

Tip 1. Life Insurance is an Important Financial Decision

  • When considering life insurance it is important to remember that the process encompasses at least two financial components.
    • Financial planning – It is important to plan for the ongoing costs of premium payments. Make a budget before making a decision. Also, talk with your insurance agent about available options should an emergency arise. For example, is there any protection or forbearance available if you cannot make your payment for a month or two?
    • Financial protection – in addition to considering types of policies you must also consider amounts of coverage. Whether you are hoping to carry enough insurance to support your children through college, help your spouse maintain the family home or fund charitable causes life insurance can help you achieve your goals.
Tip 2. Life Insurance Isn't Just for Final Expenses

  • Many people, regardless of age, shy away from life insurance because it can be a reminder of our mortality. Newer products, such as return of premium life insurance and other policies that build cash value serve as important reminders that life insurance isn't just for funerals, it is also for futures.

Why should seniors consider life insurance?

Tips on Life Insurance for Seniors

Life insurance for seniors may not seem like an immediately obvious need for a couple of reasons. The primary among older adults often skip insurance is because the child-rearing years and financial obligations for children have long since passed. Believe it or not, life insurance is a sound economic decision far into the empty nest years.

Tip 1. Life Insurance for Seniors Make Sense

There are several reasons to invest in a life insurance policy even if you are no longer actively parenting. Following are a few:

Tip 2. Financial Security is Important for Your Spouse, Too

Life insurance provides financial security for your spouse or partner when you are no longer there to carry the load or contribute financially. Obligations are not limited to final expenses; they must also include any outstanding medical, credit card and mortgage debt.

Tip 3. Life Insurance Leaves a Legacy

Many parents and grandparents are committed to leaving a financial legacy that sets heirs on firm footing. Life insurance can be an important part of helping heirs to secure their financial futures.

Tip 4. Life Insurance Preserves Net Worth

With careful planning, life insurance can be a strong shelter against taxes and fees that reduce assets accumulated over a lifetime of working. Return of premium life insurance is a particularly advantageous option here.

What are the advantages of survivorship life insurance?

Tips on the Advantages of Survivorship Life Insurance

Survivorship life insurance offers important benefits for families. Read the following tips for some of the most attractive benefits these plans offer.

Tip 1. Survivorship Life Insurance Simplifies Planning

  • This type of policy, also called a second to die policy, allows couples to protect the bulk of their assets regardless of which partner dies first. Because survivorship policies eliminate the agony of second guessing about which partner will go first, the entire family has the flexibility to concentrate on one plan that yields the most benefit for the heirs.
Tip 2. Survivorship Life Insurance Saves Money

  • Not only does this plan protect or replace assets expended through estate taxes, it usually costs less than individual policies.
Tip 3. Survivorship Life Insurance Offers More Flexibility

  • It can be discouraging to learn that life insurance is not available to a potential policy holder because of certain underwriting restrictions. In some cases, survivorship life insurance uses more flexible underwriting guidelines thus making critical coverage available to those that need it.
Tip 4. Survivorship Life Insurance Means Peace of Mind

  • Life expectancy rates are on the rise. What does that mean for children with special needs? Survivorship life insurance gives parents of children with special needs the tools to provide for their care as long as is necessary. Of course being there is preferable, but in a parent's absence there must be a plan in place that guarantees ongoing care for children unable to support themselves.

How can I get the best rate on return of premium life insurance?

Tips for Getting the Best Rates on Return of Premium Life Insurance

Getting the best rate for return of premium life insurance just makes good financial sense. But how can potential policy holders be sure they are getting the best rate? Read the following tips to find out.

Tip 1. You are a Primary Determinant of Available Insurance Rates

  • Premium payments are not just arbitrary figures thrown out by insurance agents. They are carefully considered amounts based on several factors including:
    • Your age, gender, weight and height
    • Alcohol and tobacco use
    • Health history
    • Policy term (or length of time policy will be in effect)
    • Amount of benefit
    • Where you live
    • Your insurance provider
    • Your driving history
    • Your occupation
    • Your payment terms (annually, quarterly, etc.)
Obviously, you have no control over many of the factors listed above. Don't let that deter you. Some circumstances, such as those related to health, can change. For example, more attractive rates may be available to you after you have reached a healthy weight, reached normal blood pressure and cholesterol levels or experienced 12-months without a major health problem.

Tip 2. Use an Insurance Calculator

  • An insurance calculator is a useful tool for comparing policies, planning payments, determining taxes, coverage amounts and anticipated benefits.
  • Use this tool to make your premium payments work harder for you.

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