Dec 29
Return of premium life insurance and its use in business
Prices have fallen slightly for return of premium life insurance products in the last two years. Return of
premium products are the type of life insurance that offer you all your premiums back at the end of the policy
if you don’t die. Some products have been introduced that have enhanced cash surrender values (higher than
the surrender values in the early ROP offerings). In addition, some products allow access to the cash
surrender values via policy loans. Others don’t. This is also a relatively new feature.
Interest generally in ROP is growing, as consumers like the concept of getting their money back if they don’t
die during the level term period. Business owners are human beings, and as such, they, like everyone else,
don’t like spending money on something they believe will likely yield them nothing (i.e. a term policy if you
don’t die during the term). ROP gives them an alternative. And many like it and use it in many different ways
including buy-sell agreements and key man insurance.
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