Insurance Matters: Return of Premium

By H. Darrell Watson

We are going to see the red-hot Braves play a game. The first parking lot we see costs $15. We give the attendant the $15, watch the Braves win, return to our car, and go home. The attendant keeps the $15. However, a little closer to the stadium is a $30 parking lot. We give the attendant $30, watch the Braves win, go back to the parking lot, the attendant gives us back our $30, and then we go home. Which parking lot would you choose?

The first parking lot is like a term life insurance policy. You pay on the policy for a certain period, and at the end of that term, your insurance company keeps the premiums you have paid into the policy. The term policy served its purpose, but basically, you have rented the policy.

The second parking lot is like a return of a premium life insurance policy. It does cost more than the first parking lot, but if you have not died during the term and you have faithfully paid the premiums, your insurance company gives you back every penny you have ever paid into the policy. The return of premium has an embedded savings account! The insurance company often times will give you a portion of the premium you have paid in if you are unable to continue to pay the premium.

Life insurance is the cornerstone of your Planned Protection Portfolio. Make sure you talk through all your options with your insurance agent

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