June 27, 2008, Newsletter Issue #110: Return of Premium Life Insurance Tips

Tip of the Week

If you are in the market for a life insurance policy you should be aware that there are new options you may not know about. Return of premium life insurance plans are one such option. Read on for a primer on the basics.

Tip 1. Return of Premium Life Insurance Creates a Win-Win Scenario

Return of Premium Life Insurance is a particularly attractive option for consumers because: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 if there has been no claim, i.e. if the policy holder is still living.Policy holders enjoy the peace of mind life insurance provides without the frustration of making an ongoing financial outlay that never offers any benefits. Tip 2. Return of Premium Life Insurance is much like a Safety Net for Seniors

Policy payments do not earn interest but they are not taxed upon return, either.Because the money returned to the policy holder is equal to the amount that has been paid in premiums throughout the term, there is no tax burden. For example, policy holders making premium payments totaling $20,000 receive that same $20,000 with return of premium life insurance.Return of premium life insurance functions, in essence, as a safety net and a savings plan.

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