Term insurance is the easiest of all insurances to understand and appreciate. You pay for a benefit for a predetermined period of time and if you die, the insurance company pays the agreed upon death benefit. If you decide to cancel the policy or, if the period of time you purchased (10, 15, 20, 25 or 30 years) runs out, you receive nothing in return.

Term insurance is like car insurance or house insurance, you only receive a benefit if something bad happens…in this case, you die. If you quit, you get nothing. This kind of insurance has appeal if you need insurance and you have very limited ability to pay the premiums. For example: A 35 year old male approximately would pay_____ ($16.00/month) for $250,000 of term insurance till age 65 (30 years).
If this individual terminates the policy, or at the end of the 30 years the policy terminates by itself, the insured gets nothing in return. 

RETURN OF PREMIUM TERM (ROP) has a unique feature. The premium remains lower than permanent insurance, but is more expensive that standard term. For the same 35 year old for $250,000 of ROP Term, the month cost would be approximately $37.80/month for the 30 year period. At the end of the 30 years, the insured would have paid total premiums of $13,608 which they would receive back at the end of the 30 year period if death had not occurred; in essence, the insurance was free as the insurance company refunded all the premiums you paid.

You need to be careful and fully understand that the amount of “return of premium” is lower in the early years of the policy. An example, if you purchase a “return of premium” policy and terminate the insurance at the end of year 5, you WILL NOT get back 100% of the premium paid at this early point, instead, you will get a small amount of what you paid. Not all companies are the same and you must shop wisely. If, on the other hand, you keep the insurance until the end of the agreed upon period, you WILL receive back all that you paid.

LTINSURANCE represents some of the major international insurance companies for Term and ROP term. The Hartford, a 200 year old US Company with offices around the world. Harford has been named “one of the most ethical companies in the world” and has designed competitive term and universal life products. Also, LTINSURANCE represents AIG/American General, an international life company that has competitive and attractive ROP term products as well as ING ReliaStar Life Insurance Company.

Let Paula/Birute Paulauskaite design the right plan, from the right company for you and your family.

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