Life insurance that pays out?

Question

Are there any types of life insurance that pays out even if you do not die? I am 28 yrs old...and say I buy a 20 year life insurance policy, if at the end of the 20 years....when I am 48....can I collect what the policy is worth? Is there even such a thing?

Pls advise.

Answer 1

I'm not sure what kind of life policy you got, but it seems to be a 20 year term policy. At the end of the 20 years, you do not collect the face amount. Your term may just stop coverage at the end of 20 years or automatically renew every year or 5 years to a premium base on the new age. For example, lets say you pay $300/year on a 20 year term. In 20 years, it renews, and you pay $1100/year. If it does renew, you remain covered until age 100 or until you stop paying your premiums.

If you have a 20-Pay whole life, this is where you stop paying for whole life in 20 years, but you still remain covered for the rest of your life. This payment option will be higher if you were to pay the normal premium for the rest of your life. At the end of 20 years, there is couple of things you can do with the cash value. You can borrow it to remain covered. Of course, you will lower the face amount of the policy if you borrow the cash value. You may surrender the policy and pay surrender charges and maybe even income tax on the cash value. Or you can just leave it alone.

Hope this helps.

Answer 2

Sure, there's a product out there that does that . . . it's just not a particularly good investment, unless there's some different goal you want to achieve that you haven't mentioned.

The CHEAPEST insurance is term life. A 20 year term policy might cost you, oh, $125 a year for $100,000. If you want something fancy where you get all the money back that you paid in, the only thing I'm thinking that will do that is a fully paid policy - you pay them $15,000 right now, up front - they invest it for the next 20 years. If you're still alive, they pay you your $15,000 back - but keep all the money your money has made for them - probably close to that $100,000.

You could buy a whole life policy that would build cash value - for maybe $1500 a year, and by the time it's 20 years old (and you've paid in $30,000) you've probably built up a "cash value" of $10,000 or some such, so you could get THAT much back.

But if you want to put in $1500 a year, you're best off just buying into a mutual fund.

Answer 3

HI, your friendly insurance guy here again!

There are basically two ways you can get a life insurance policy to pay out equal to the death benefit when you have not died.

1. Buy a Whole Life policy configured to endow (reach maturity) at an early chronological age. this will cost a lot of money and is generally not a cost-effective thing to do.

2. If you're diagnosed with a terminal condition and you have a policy with an Accelerated Benefit Rider you can collect the full face value while still alive. Usually this means youhave to show evidence you're not supposed to live more than 1 year.

There is also the "Return of Premium" rider available on some Term policies. This will not let you receive the full face value of the insurance while still living. It will give you back most of the premium you paid during the policy term if you survive that long.

If you have questions, please feel free to write.

Answer 4

Assuming you're asking about a 20 year term life insurance policy that pays out, yes, there is a policy. It's called Return of Premium Term Life Insurance.

Return of premium term insurance (ROP) is a relatively new type of coverage that generally combines low, term-like, premiums with a guaranteed refund of the premiums paid during the level term period, assuming the insured is still living at the end of the level term. These ROP plans are available in 15, 20, or 30-year term versions. Consumer interest in these plans has continued to grow each year, as they are often significantly less expensive than permanent types of insurance, yet, like many permanent plans, they still may offer cash surrender values if the insured doesn’t die.

Answer 5

THere are some Life insurance policies that pay out if you are still alive when you are 100 but I think it might be best if you start putting your money in an annuity. The best annuities that I have found are equity index where a small part of the money is put in stock and the other part collects an interest as high as 7 percent. I am not a fan of putting ALL of your money into stock knowing the risk involved but with an Equity indexed annuity- you never loose. Alot of other variable annuities can have a rider saying that you can never make less than a certain percentage per year...but then again...you pay for that rider. I hope this is help

Answer 6

myapt, lots of theory here so lets look at some real numbers. at your age and assuming you are in typical health, i ran a 100K policy with an A++ rated company.

whole life:
monthly premium - $72 per month
cumulative premium for 20 yrs - $17,300
cash value (if you want your money back) - $24,323

term (20 year):
monthly premium - $10 per month
cumulative premium - $2420
cash value - doh! none silly.

so, for term you PAID $2420 for the coverage and now it is gone ... you get nothing back. for the whole life you PAID $0 because you got back $7023 more than you paid in. this is 40% MORE than you paid!

term ROP is a rip off. it is a marketing scheme designed by all the companies that 15 years ago convinced everyone to buy term in the first place. term ROP is the middle choice for insurance like variable universal life is. neither one are very good at "insurance".

finally, equity indexed life and annuities are a rip off (generally speaking). they have a cap on what you can earn from the market! if the cap is 14% and the market does 20% - you miss out on the extra 6%. hmmmmm, not so fair sounding now is it? IN ADDITION ... you generally dont get dividends paid in EI products!!! so, if you get another 2% of payout based on dividends, the company keeps these too!!! unbelievable! my prediction is when this becomes common knowledge, expect to see some major fines from regulators onto those offering and (shame on you) selling them.

((for common knowledge: read your contract or policy ... it says this IN there!))

Answer 7

The short answer is absolutely. It is called ROP Term, which means Return Of Premium. Let's say you have a 20 year ROP policy and the death benefit is $500,000. Let's also assume the premium is $500 per year. If you die in year 1 or year 19, your beneficiary would receive $500,000. If you are still alive at the end of the term, you would receive your $10,000 back from the Insurance Company.

Answer 8

just buy a whole life policy and not worry about it. There has to be some reason you think you need life insurance. If you're that concerned about the couple hundred you'd spend each year on premiums, you should be doing better things with your money than wasting on insurance you won't even use.

(note the heavy amount of sarcasm)

Answer 9

Yes, my policy pays out a cash value at the end of it's term. You may want to try getting a quote online. I am paying less than ½ of what I was before.

Go to: http://www.insureme.com/landing.aspx?Refby=616164&Type=life

Take care,
Casey

Answer 10

With regards to Dandouna's recommendation of equity indexed annuities. While it may seem trivial, from an industry compliance standpoint it is important to point out that nothing deposited into an indexed annuity is ever put into stocks or any security. An EIA is a fixed annuity which pays interest based on a securities index. The important point is that one has the potential to earn market-based gains while having no risk to one's principal. From a risk-reward perspective, they cannot be beaten.