What is ROP Life Insurance?
ROP is simply an acronym for “return of premium” life insurance. ROP life insurance is just like other forms of life insurance, it is an agreement between you and the life insurance company that issues your policy.
To keep your policy active you agree to pay premiums. It is the carriers’ responsibility to pay your beneficiaries an agreed upon sum of money if you die while the policy is in force. And, like all life insurance, ROP term life insurance is a greatt way to protect your loved ones at an affordable price.
How does ROP Term Life Insurance Work?
The key difference between return of premium life insurance and other types of life policies is that with ROP term life, at the end of the guaranteed term period, the carrier will return, or refund, all of the premiums you have paid over the life of the policy.
This means that at the end of the term period, you will have had the peace of mind of knowing your family was financially protected in the event you died, at essentially no cost to you!
Who Should Get ROP Term Life Insurance?
Anyone who has need for term life insurance and could afford to pay a little more to ensure they receive their money back. Return of premium life insurance makes it possible to have coverage with what is in reality a net cost of zero. Remember, at the end of the term you will have had the full amount of coverage AND received all your money back).
And, ROP life insurance with a highly rated company is also a very safe place to save your money and receive what amounts to a modest return on your investment.
Why Wouldn’t I Get ROP Term Life Insurance?
Cost. people simply don’t get ROP term life insurance due to the fact that it costs more. It can cost up to three times as much as term life insurance depending on your age, health, etc.
Also, some financial advisors might argue that if you can afford an ROP life insurance policy that you could consider getting a regular term life insurance and investing the difference in premium.
By investing the difference in premium you could end up having more money at the end of the term period than you would get as a refund from the ROP life insurance. However, if you are not the type to take a disciplined approach to saving and investing, then this might backfire, so weigh your options carefully.
If this type of insurance makes sense for you, most people usually get return of premium term life insurance policies for 20 or 30 years. The actual cost of the premium is usually less for the longer term policy since the return on your investment will be higher the longer you have the policy.
