.png)
Nobody likes paying for life insurance. But what if there was a way to get all the money BACK? If you don't use the policy, which is a good thing, there's a way to recoup all the premiums paid. Find out more!
QUESTIONS? REACH OUT!
There's a way to get all your premium back at the end of the term. Watch and learn!
Life insurance is a necessity for those with loved ones and family that rely on their income to survive. If you want to protect your family and ensure that they’re taken care of financially, life insurance is the solution.
The downside, of course, to having anything is paying for it, and life insurance premiums are no different. Although affordable life insurance options are definitely out there, especially when you’re young and/or in good health, those premiums need to be paid every month on an ongoing basis to keep that valuable coverage in place. If you stop paying your premiums, your coverage will go away.
So there’s no way around paying your premiums, right?
Well, yes, that’s right. You have to pay your premiums, no way around that. But there is a strategy you can employ to essentially get life insurance for free using Return of Premium.
RETURN OF PREMIUM POLICIES
Pay higher premiums now, but get all your moneyback later.
These policies are becoming less commonplace in the market, but there are still some to be found out there.
A policy with a Return of Premium option gives the owner the opportunity to get all of the premiums they’ve paid into the policy back after a certain period of time. The Return of Premium feature may come in the form of a rider, as a natural result of overfunded policy design on permanent policy, or built into the product itself.
Generally, a product with Return of Premium capability is going to cost more per month, but you would be paying that increased rate every month with the understanding that you would get all of that increased premium back in your pocket sometime later. Once you exercise the Return of Premium feature, the coverage ends and you’d be fully refunded, but without coverage going forward.
For example, if you decided to go with a regular 20-Year $500,000 Term policy, you might pay $50 per month in premium. You’d pay that premium every month for 20 years, and when that Term period expired, you’d be out a total of $12,000 in premium paid over 20 years. That money would be spent and gone, and your coverage would be over.
Alternately, if you chose to instead be covered with Guaranteed Universal Life policy with a Return of Premium option, you may pay $100/mo in premium for the same $500,000 in coverage. At the end of 20 years, you will have paid $24,000 into the policy, double the premium of the Term product – however, since this is a Return of Premium product, you could then exercise your option to get the entire $24,000 back. You get all your premiums back, coverage ends there, and you essentially just received free life insurance coverage for the past 20 years!
If you’re interested in looking into a Return of Premium policy design, the friendly folks at Alliance Group can connect you with one of our partners in your area who can help.
If you're like a lot of people, you don't like paying life insurance premiums. Nobody likes to do it. They like insurance and they like what it does, but they don't like to pay for it. Let me explain an idea today, a concept that may be of interest to you. It may change your way of thinking about life insurance.
Let's put it in the context of a story. If you could go down and lease a car and at the end of that lease period, you turned in the car and they gave you all your money back. Or they could say, you can keep leasing it if you want to keep it because you like the car so much.
Would you do that? Of course you would. We would all do that. Well, there's a type of plan available today that you can do that with your life insurance. You can purchase this policy and down the road in 15 years, if you decide no longer that you need the coverage, the insurance company will give you 65% of the premiums that you paid back.
And you get you get it back tax free and it's yours to do what you want with. And then if you determine that you want to keep it, you can keep it and in the 20th year, they'll give you all your premiums back and the same thing in the 30th year. In the 30th policy year, they'll give you all of the premiums that you paid in the contract back.
So in essence, you had coverage that entire time and they'll give you all your money back and you've got the insurance, you got the coverage for free, the protection for your family. In addition to the death benefit, these policies, these contracts are special new kinds of insurance that come with living benefits, critical illness, chronic illness, terminal illness...
So if you have a heart attack, cancer, stroke, Lou Gehrig's disease, the insurance company will pay out part of the death benefit. They'll accelerate part of the death benefit while you're alive. So if you do have a heart attack and are unable to go to work, you'll have the money to pay your mortgage, you'll have the money to pay groceries, to pay gas, to put you to keep your kids in school.
But if nothing happens and you're lucky and you live, you know, ‘til 20 years or 30 years and you don't need the coverage anymore, let's say your house is paid off, your kids are grown up and out of the house. You can get all of your premiums back. Or if you want to leave the money there to to leave some money for your kids or grandkids, leave the leave the policy there, and keep paying the original premiums for as long as you want to keep it.
If you're interested in learning more about this type of policy and what it might look like for you, please reach out and we'll put together a plan specially designed for you and the protection for your family.
