This is Liran Hirschkorn from ChooseTerm.com, and in this video I’m going
to talk to you a little bit about why return of premium life insurance is
not a good idea coming up in this video.
So you may have been considering return of premium life insurance. Here’s
some reasons why I don’t think return of premium life insurance is a good
First, if you look at the cost of return of premium life insurance compared
to just regular, let’s say 20 year term policy or 30 year term policy, the
costs are going to be a lot higher. Probably three, four times higher than
a regular term life insurance policy. But of course, the upside is oh, well
I’m going to get all that money back. The reality is that there are several
reasons why you shouldn’t do it.
One. The return of your money, the return on your money with return of
premium life insurance on average is about three percent. What does that
If you take the cost, the difference between a regular term policy and a
return of premium policy, and you take that money, the difference, and you
look up over the term of the policy how much you put into it and how much
you’re going to get back by getting that return of premium, it’s only a
two, three, four percent at most return over a 20, 30 year policy. You can
do a lot better by taking a regular term policy and investing the
difference in something else.
The other big reasons why I really don’t like return of premium life
insurance is because you only get your money back if you stay with the
policy throughout the entire length of the term. So if you buy a 20-year
return of premium life insurance and 5 years into it you decide you either
want to replace the coverage with more insurance, you don’t need the
coverage anymore, your policy lapses for some reason because you missed a
payment and something happened, you’re not going to get any of your money
So although you’ll see agents and I’ve even seen here on YouTube promoting
return of premium life insurance online, it’s because ultimately the
premiums are higher and the commissions are higher for agents. But I really
don’t recommend return of premium life insurance.
You can visit our website ChooseTerm.com and you can actually compare both
let’s say 20,30 year term life insurance and you can actually use our
instant quote tool to compare return of premium life insurance. And you can
see the difference is astronomical between the rates. So what I recommend
is just buy a regular term policy to meet your needs over the next 20, 30
years when you are going to need insurance. It’s so much cheaper and it’s a
much better way to go.
And if you really want some kind of return, or if you want a policy that
will give you more, then look at something like a guaranteed universal life
insurance policy. No lapse. It will last the rest of your life. It will be
guaranteed to pay out. And it’s a cheaper form of permanent life insurance
than a whole life insurance policy. And that’s what I’d recommend.
Visit our website at ChooseTerm.com. My
name is Liran Hirschkorn and I look forward to speaking with you about your
life insurance needs. Thank you.