Reviewing the Return of Premium Life Insurance Policy

• Making a decision on the type of life insurance policy to purchase can be a difficult one. This is because there are so many policy options in the market and insurance companies are coming up with newer policies every now and then to beat competition. Besides this, life insurance is a long-term commitment and making a mistake on choosing the right insurance policy can cost you years of your hard-earned cash. However, with the right information, you can end up with an ideal cover that will be great value for money. Below is some information that can help you make a decision for or against the Return of Premium life insurance policy.

• What Is Return of Premium Life Insurance Policy?• The return of premium policy is a term life insurance cover that comes with

the added benefit of repaying you all your paid premiums after the term lapses. Term life policies are policies that cover you for a specific period of time, say 30 years. Once the specified term lapses, the person insured is no longer under the cover and will need to take another policy to continue enjoying coverage. This is unlike the permanent life policies that cover you for the whole of your lifetime. However, unlike a regular term life policy whereby no funds are repaid after lapse of the term, the return of premium policy will restore dollar for dollar of all the premiums that you have been paying over the term of the insurance policy, that is, if you get to outlive the policy. What this means is that if you die before the policy lapses, your beneficiaries are paid the sum assured. On the other hand, if you outlive the policy, you get refunded your premiums paid.

• Is the Policy All That?• Well, at the face of it, a return of premium life insurance policy may sound like

a real great deal. You get to make money whether you pass before the term or whether you outlive it. However, there are some aspects of the policy that you need to be aware of. For a start, the life insurance return on investment policy is significantly more expensive than the regular term life policy. The policy usually cost between 50% to 300% more than an equivalent term life cover depending on various underwriting factors. Furthermore, you do not get any interest on the premiums paid over the years. For this reason, some financial advisers recommend paying for a regular term life cover and investing the excess of the premium.

• So, Which Option Is Best?• In practice, many of those who go for the option of investing the difference

never get to make the investment. This means that after the term, a person who went for the return of premium life policy may be at a better Investment Insurance position. Therefore, the decision on whether to go for the return on premium policy or purchase a regular term life and invest the difference has a lot to do with your investment discipline. Another alternative you can consider is purchasing a permanent insurance policy and taking a loan against cash value once you qualify for one.

• Article Source: http://EzineArticles.com/6894129

https://twitter.com/bajajal l ianzLIC

https://www.youtube.com/user/j iyobefikar

https://instagram.com/bajajal l ianzl i feinsurance

Follow us on

https://www.facebook.com/bajaja l l ianzl i feinsuranceltd

http://plus.google.com/+bajajal l ianz/posts

https://www.l inkedin.com/company/bajaj-al l ianz- l i fe- insurance-co-ltd-

Click to know more on Investment Insurance:

https://www.bajajallianzlife.com/investment-plans/investment-insurance-plans.jsp

Thank You..!!