Money Back Term Insurance

Money Back Term Life Insurance

Quotes for return of premium life insurance are available from TermInsurance4Less.com's Return of Premium Life Insurance page.

These types of insurance policies give you the ability to receive ALL premiums paid during the term of your contract if you are still alive at the end of the term selected.

How return of premium life insurance works.

For example, the return of premium life insurance quote for a 35 year old male non smoker in Preferred Plus Health is $75.80 per month for a 30 year, $500,000, return of premium policy with American General.

Over the 30 year period this man will pay $27,288.00 for his $500,000 worth of coverage.  With a return of premium plan he is contractually guaranteed to get the entire $27,288.00 back at age 65, when he 30 year plan is over.

These funds are distributed on a tax free basis because he is only receiving his original monies back.

Would regular term insurance have been less?

The same individual could have purchased a straight 30 year term plan for $41.48 per month and have spent a total of $14,932.80 over 30 years for the same coverage, but received back nothing at the end of the 30 years.

So which option was better?

Over the 30 year period, the return of premium life insurance policy cost $12,355.20 more than the standard 30 year term plan but this "investment", made over a 30 year period resulted in a tax free return of $27,288.00.

To achieve this guaranteed amount the man would have to earn 4.71% tax free on his extra investment of $34.32 a month.  The $34.32 is the difference between the $41.48 monthly premium of a standard no money back plan, and the $75.80 monthly cost of a return of premium plan. 

If he can easily find a guaranteed after tax return of 4.71% on regular monthly investments of $34.32 then the regular term plan is better, assuming he is disciplined enough to invest $34.32 a month. 

Otherwise the return of premium life insurance policy can be very attractive.