A return of premium rider will repay your term life insurance premiums if you do not pass away before to the policy’s expiration. Getty Pictures
At some point, purchasing life insurance is a requirement of adulthood. But if you outlive your coverage, you may feel as though you’ve squandered a lot of money.
However, this is not always the case. Policyholders have options when their term life insurance policy expires, including the opportunity to receive a refund of their payments.
If you’re in the market for life insurance, you should begin by obtaining a free pricing quote so you know what to expect.
To fully comprehend how to obtain a refund of term life insurance premiums, it is necessary to first comprehend what this sort of policy comprises.
How is term life insurance defined?
Term life insurance is a policy that provides coverage for a fixed length of time, typically between 10 and 30 years. The policy will only be in effect for the specified time period. Whole life insurance coverage, on the other hand, is permanent.
Premiums for term life insurance are generally inexpensive, and coverage amounts can range from $100,000 to millions of dollars.
The results of your medical checkup are frequently used to set your monthly premium.
What occurs once a term life policy expires?
Many policyholders are unaware that they have various options once their term life insurance policy expires, despite the fact that all term life policies expire. When this occurs, there are options from which to choose:
Conditional payment return
Some buyers fear that if they outlive their term life insurance, they would have squandered their money. This is when the return of payment clause comes into play. This rider will repay your term life insurance premiums if you do not die before to the policy’s expiration. It ensures that you will receive a refund if you outlive the period.
If you have a strong family history and are in good health, it may make sense to get a return of payment rider.
But make sure you can afford it by doing the arithmetic. A return of payment rider, like other insurance riders, adds an additional fee to the policy. This can dramatically increase the cost of a policy compared to a standard term life policy.
However, if you cancel the coverage or cease making payments, the money will not be reimbursed.
Explore your options for term life insurance by requesting a free price estimate now.
Transform the policy
Before purchasing a term life insurance policy, you can select one that can be converted to a whole life policy throughout the term. Some insurance companies offer a specific timeframe during which you can switch your coverage, while others allow you to do so at any time. While there are no fees associated with converting a coverage, your premiums will often increase. Term life premiums are significantly lower than whole life premiums.
You may be able to convert a portion of the policy into a permanent insurance while retaining the remainder as a term policy. Inquire with an insurance representative about your options before purchasing a policy.
Allow the policy to lapse.
The goal of life insurance for the majority of people is to replace your income after death so that your loved ones do not suffer financially. When selecting a term, you must ensure that it will not expire while your family is still dependent on your income. If you choose the appropriate period, you can let the insurance lapse without purchasing a new one. You must be self-insured at that moment.
Register for a new policy.
You can acquire a new insurance if you determine you still need coverage after a term policy expires. This could occur if your personal circumstances change after the first policy purchase. For instance, if you have children later in life, you may require a new insurance to cover their future costs.
Generally speaking, as you age, your premiums will increase. And if you are a senior with certain health concerns, you may not be eligible for a term coverage. A 60-year-old female seeking a $500,000, 20-year coverage may pay between $138 and $218 per month, for instance. A lady of age 30 with a $500,000, 20-year insurance may pay between $16 and $24 per month.
Your insurance requirements will likely decrease as you age, so you might save money by purchasing a shorter coverage or paying a lesser premium. For instance, a 10-year coverage with a $100,000 payoff is available. These rates will be more inexpensive while still providing coverage for your family.
Get a free quote immediately, or use the table below to compare leading life insurance companies.
Some individuals may be hesitant to obtain life insurance for fear of losing their money if they outlive their policy. However, this is not always the case. With a life insurance rider, you may be able to receive a refund of your premiums or change your policy to one that is more suitable for your new circumstances.