Cash Back Life Insurance

WHAT IT IS

It is important to know that to make this work, the insurance premiums are usually higher on this type of policy.

Like a standard term life insurance plan, you pay regular premium payments to keep a return of premium life insurance policy active. In standard plans, these life insurance premium payments are usually non-refundable and owned by the insurance company. However, if you outlive your term in a return of premium life insurance plan, you'll be able to recover these payments. This means you’ll have the chance to help pay for retirement, college for the kids, to help pay off or reduce your mortgage, or invest further in your future – it is your money to do with it what you which should you outlive the insurance term.

For example, let’s say you buy a 20-year cash back life insurance plan. If you die within the 20-year term, your family will receive the death benefit and the premium payments will be kept by the insurer. However, if you outlive the 20-year term, you will be able to get a refund of your premium payments.

WHY IT IS USEFUL:

-You have the ability to reclaim past premium payments if you outlive your term.

- Cash Back Life Insurance can act as a savings account with a bonus life insurance add-on.

-If you receive your premiums back, your lump sum may be tax-free.

A return of premium life insurance policy might work for you if you can afford to pay a higher premium. Remember though, if you do not outlive your term, it will have been much more expensive than a traditional term plan, while essentially offering the same death benefit. This is not bonus money that you are getting back –it's your money that you have already paid the insurance company.