Many life insurance agents offer what they refer to as ‘free life insurance’. This terminology is used to describe a special type of life insurance. The proper terminology is called ‘return of premium rider’. Lets look at what this really means.
Free Life Insurance = Return of Premium
Lets be real, the life insurance isn’t free, at least not up front. Term Life Insurance is designed to pay a death benefit if the insured dies during the term. Wait but what happens if you out live your term? If you out live your policy typically your coverage will either end or your policy can be converted to a permanent policy. Usually this conversion results in you paying a higher premium. With a return of premium rider, you get all your money back! That’s right all the money that you paid in, you get back!
Benefits of Return of Premium
With return of premium you get the money you paid to the life insurance company back if you out live your policy. This type of policy was introduced in the 1990’s. Many look as this as a savings account while also protecting your family. Usually, the return of premium will result in the policy holder paying a slightly higher price, but they get the money back at the end of term as long as they outlive the term and pay each scheduled premium payment.
Help Protect Your Family with Life Insurance
Many people don’t find value in life insurance until it is too late. How many times have you seen Go Fund Me being used to help pay for just the basic needs after someone dies? Many families can get covered for less than a dollar per day. This is why return of premium is a great option. After years of paying for insurance, you get your money back. Some companies don’t like to offer this coverage because for some companies it is not as profitable. If you are looking for life Insurance make sure to ask your agent about this rider.