woman-profileSince the 1990’s, life insurance companies have offered special riders to term life insurance policies called Return of Premium (ROP). In the event that you choose to purchase a term life insurance policy with a ROP rider, 100% of the money paid into the policy is paid back to you as long as you keep the policy in force for the full term.

Of course, if you die during the life of the term policy the net death benefit is paid to your designated beneficiaries. Since statistics provide that most individuals who purchase term life insurance outlive the term, this may be an attractive option. However, it is prudent to put pencil to paper to determine if a ROP is right for you.

Since the premium is usually higher for ROP term life insurance than traditional term life insurance, the rider is not free. Also, the insurance company retains the additional premium payments, including any interest on the rider-related premiums, during the course of the 20-30 year term of the policy. As such, you will not have the ability to earn interest on the money provided to the life insurance company for premium payments.

As always, when you are considering life insurance products, it is always prudent to discuss the options with a life insurance agent together with an experienced estate planning attorney to ensure that both the policy and the beneficiary designations are proper for you.

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