RETURN OF PREMIUM LIFE INSURANCE

Return of Premium (ROP) life insurance performs like a regular life insurance, where you pay money to the insurance company, and the insurance company will pay money to your beneficiary if you die; however, ROP has one additional feature: at the end of the insurance coverage, the insurance company will refund or return all of the premiums you have paid (plus to the death benefit you applied for). In case you decide to cancel your policy before the end of the specified term, the insurance company will pay back the amount according to the schedule on the contract. That amount will depend on how long the policy stayed in force before the cancellation: the longer – the higher the amount paid.

This type of life insurance is more expensive than a regular life insurance. However, a lot of people strongly believe into it and look at it as buying a life insurance “for free”.

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