Does anyone have any advice on whether it is worth spending the additional money to get all of the premiums back with return of premium? I know that I could invest the additional money myself and have access to the money. However, forced savings does have some merit.
2007-01-16 14:17:54 · 5 answers · asked by happymommy 4 in Business & Finance ➔ Insurance
1st of all, term does not provide any forced savings b/c it has no cash value like whole life does. W/ the ROP (return of premium rider), you are not saving anything. You are simply geting a refund with no interest. If it paid interest, then it could be thought of as a savings, but that is a stretch.
Depending on age, likelyhood of survival after term & cost, it could be a good deal. It may not be too bad a deal with someone under 40 & it does not cost too much extra. But I think after the term is up & you get your money back, use most of it to buy a single premium paid up policy. That way you still have insurance & a small windfall.
2007-01-17 02:51:52 · answer #1 · answered by ricks 5 · 0⤊ 0⤋
Generally, insurance is consider a type of 'forced savings', however, the objective of buying insurance is still the same - to get protection.
If we assume the inflation rate is 6%, 1,000 dollar today will become 500 dollar after 12 years time. (I use a simple calculation method -Rules of 72, 72 divided by inflation rate, 6 %, you will get the answer 12).
There are plenty of investment tools nowadays and if you have strong discipline in managing money, then you could buy a pure term insurance and invest the rest.
However, if you insist to buy return of premium term insurance, make sure it comes with convertion option (the privilege to obtain permanent coverage in the future without health conditions declaration).
2007-01-16 14:50:08 · answer #2 · answered by malaysiainsuranceguide 3 · 1⤊ 0⤋
You like most of your generation will live to be about 86 yrs or more. That is niether here nor there. At your age with your history of health you should be able to get at least ONE MILLION in Term ins. You are wasting your time buying whole life ins. Go on line you will find several....... I use direct quote. You will be surprised at your age how inexpensive 1 Million will cost you. Do NOT buy the first thing you see go to several companys.... That is the thing about D Q they will find you the best insurance for the price.
2016-05-23 22:47:39 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Insurance will not refund the premium since you were purchasing protection. Its not possible. Unless you are still in the first month of the policy, then you may be able to ask a refund.
2007-01-17 19:16:39 · answer #4 · answered by Anonymous · 3⤊ 0⤋
The biggest merit of "forced savings" is I make a lot more commission off of those types of policies.
2007-01-16 15:26:02 · answer #5 · answered by Anonymous 7 · 1⤊ 0⤋