Return of premium life insurance is a relatively new type of term life insurance that gives you all the benefits of a traditional term life insurance policy, plus the added benefit of receiving all of your money-back if you out live the policy term. Like other types of life insurance, if you die during the term of the policy, your beneficiary will receive the full face amount of the policy.

The "term" of the policy is typically 10, 15, 20 or 30 years. This means that for a 30 year return of premium policy, you would need to maintain the policy and pay the premiums for the full 30 years in order to receive your total premium paid. If the policy is cancelled prior to the end of the term, you can receive a portion of the premiums you paid back, but not 100% of what you paid. Any premiums returned to you are considered income tax free, because you cannot receive back more money than you put into the policy.

The advantages to this type of policy do come at a cost. The premiums for return of premium life insurance are higher than traditional term life policies. Many people prefer these policies because you are guaranteed the full death benefit if you die, and most if not all of premium you paid if you survive the term of your policy.

If you don't like the thought of paying for a life insurance policy and getting nothing back if you outlive the term, or if you are not good at saving or investing money on a regular basis, return of premium life insurance could be a good option for you. No interest is paid on the premiums you pay; however, when comparing the difference between a return of premium policy and one without that option, one can argue that the rate of return on the difference in premium paid is attractive.

The licensed agents at Spectrum Direct can help determine if return of premium life insurance is right for you. They can answer any questions you have and provide a free rate comparison from highly rated carriers offering this product.

Ready to get started? Call Spectrum Direct toll-free at 1-800-438-7343.

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