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What is Return of Premium in an insurance policy?
Return of Premium (ROP) is a relatively new feature available in Term Life Insurance. The major drawback to Term Insurance is that if you live beyond the stated term of the policy one of two things happens. It either ends completely and all your premiums are gone forever or it increases from the guaranteed premium to some new amount which is generally thousands of dollars more. A recent 43 year old female I quoted had a $325 premium guaranteed for 20 years but if she wanted to continue coverage in year 21 without being medically underwritten, the cost was over $7000. To solve this insurance companies added a Return of Premium rider. In the example above, if she lived for twenty years she could get all the premiums she paid back. There would be no interest or other enhancement, just the exact amount paid. However, to continue the example above, the premium amount with the ROP included would be $1103 for this woman. It is important to know that this idea has been extended to some other forms of coverage. One company that offers Defined Benefit Health plans and supplemental plans has a rewards program that does the same thing. If you keep the plan in place for five years you can get 50% of your premiums back, wait until year 7 and get 75% back or wait until year 10 and get 100% back. Many of my clients like their supplemental plan that includes Ameritas Dental, VSP vision, Rx plan, $10,000 AD&D, $7500 Accident plan and much more for only $89/month for the whole family. That is cheaper than most family dental plans.
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The term you are looking for is "paid-up additions" or "paid-up additional life insurance"
a lower deductible
Life insurance a/c......... Dr to cash a/c
Washington National Ins. Co. offers supplemental Cancer, Heart/Stroke, and Accidental Injury Insurance with a Return of Premium rider on it, or referred to as a Cash Retur…n Rider in some states. The policies pay back all premiums paid in, above and beyond any claims paid out after the customer keeps the policy in force for 20 or 25 years (depending on your state), or age 75, whichever comes first. It is not necessary to claim the return, once the policy has reached its maturity date, the policyholder is contacted to notify them that the return is being processed.
That is called rebating and it may or may not be illegal in your state. Check with your local department of insurance.
You can calculate life insurance premium for a life insurance policy by requesting free life insurance quotes online or from a life insurance company. Rates for lif…e insurance vary by insurer. Some of the factors that insurers consider when determining your premium include the following: Age, gender, height-to-weight ratio, amount of coverage, type of policy, smoker/non-smoker, your health, your family's health history, etc.
They will refund any of your unused premium. For example, if you paid $600 in full for the year and you are 2 months into the policy term then they would owe you $100.
If the insured cancels their own auto insurance policy how is the return premium calculated and is there a penalty?
Answer . \nIf you cancel your policy is will probably be short-rated which means you will be penalized for canceling. There are published factors but I can't give you the s…hort rate factor without knowing the dates of the policy.
What criteria do insurance companies use when determining the cost of home insurance policy premiums?
The factors can vary by jurisdiction (for example, some states do not allow "credit" to be used in rate determination) but as a general rule the following criteria are u…sed: * Fire protection rating as determined by ISO (how effective your local fire department and fire safety codes are) * Age of home * Construction type (e.g. frame or masonry) * Roof type (e.g. composition shingles, tile, or tar/gravel) * Credit or "insurance" score of the named insured * Prior claim history of the named insured (many insurers do not surcharge for prior home claims, but ALL use them to determine eligibility) * Expected loss frequency and severity of your local area Property insurance can be a volatile line of business for insurers (think Katrina...) and rates will vary greatly between insurers and from area to area. Call several agents or independent brokers to compare rates. You might find that smaller regional companies are priced better than the larger national insurers. In my experience, they often handle claims better and faster too. Your state insurance commissioner will also be happy to answer consumer inquires about insurance laws, rating and specific insurer complaint ratios.
Premiums for insurance policy are comprised of: - A rating based on the vehicle make and model - Whether or not the vehicle has a loan - The age of the operator - The …gender of the operator - The coverages selected including: liability, comprehensive, collision, uninsured motorist, personal injury protection and any additional policy features such as roadside assistance, or rental reimbursement. - In determining premiums discounts such as Accident free, or a good student discount are included - Your city and state - The number of tickets or accidents the policy holder has
insurers set premiums based on the equivalence principle where they set the present value of future outgo to the present value of future benefits. the calculations allow for… an implicit profit due to interest spreads.
The only way you can get your premiums back when a term life policy expires, is if you purchased what is known as a "return of premium rider". This would have been done initia…lly when you bought the policy. What this does, is generally doubles the premium (on average), versus what you would have paid without this option. The good thing about doing this, is that it would ensure you would receive 100% of paid premiums back at the end of the term (assuming you were still alive). Some people don't like this because it costs more. However, other people see it as getting your money back after initially paying double, versus paying half the premium, and never getting any of it back (unless you die within the term defined in the policy). Feel free to contact me for more info.
Endowment policies. In normal life insurance policies, if you outlive the policy term you wont get any money. Whereas, in case of endowment policies, the insurance company ret…urns a big % of your insurance premium to you at the end of the tenure. So, these policies are much higher in terms of premium when compared to regular or pure-term life insurance policies.
It all depends on many factors: the client's age, gender, resident state, tobacco user or not, health issues and medications ... For example, a healthy Male, age 35, non smo…ker, can get $200,000 WL policy for $116.17 per month (with Company A) and a UL - NO-LAPSE-GUARANTEED policy for $200k for $79.93 per month (with Company B). Premiums will never change for the life of the insured, and the policy is guaranteed to stay in force.
What type of disability insurance policy likely to have he lowest premium for a given monthly payment?
Speaking very generally, an "any occupation" disability policy would have a lower premium than an "own occupation" policy. To collect under the first, one would have to be una…ble to perform any sort of job for which he/she is fit by virtue of education, experience or training. In contrast, you should be able to collect under the second type only if you are unable to perform the functions of the job that you had at the time of onset of disability. Therefore, since it is harder to qualify for benefits under the first type, the premium should be lower. Another factor to consider is the "elimination period". This is sort of similar to a deductible in a property and casualty policy. It provides that the disability must last for a set period of time before benefits are payable. For example, there may be options to elect a 30, 60, 90 or 120 day elimination period.
Return-of-premium life insurance is like an ordinary life insurance policy, but payments made on premiums are returned to the insured individual if the policy ends and they ar…e still alive. Thus, return-of-premium life insurance policies do not punish one for outliving their life insurance. The average such policy might cost 25% to 50% more in premiums, compared to an ordinary life insurance policy.
Term insurance is NOT permanent! As the name suggests, the policy is designed to protect for a specific term or number of years. Rates are fixed for a certain number of year…s selected at policy purchase time. Before the policy expiration, the policy owner has the option to convert the policy to a permanent coverage if insurance is still needed, or let it lapse and stop paying premiums. Some term insurance has a return of premium clause, which allows that premiums be returned and can be used to buy a paid up permanent policy, for a lower benefit amount, without any underwriting. Not all companies have the option to convert to a permanent life insurance policy. Ask for a convertible term life insurance policy when you're looking for term insurance, just in case you may still need the coverage beyond the initial term period. ANOTHER EXPLANATION: No, term life insurance is not a permanent policy. That word applies only to whole life insurance. In term insurance, premiums are fixed for a certain number of years selected at the time of application. One of the choices is usually a level premium for a fixed period of years. The thing to understand about term insurance is that premiums increase with age, unless the level premium option is selected. Even then, the premiums remain level only for a fixed period of time, for example, 20 years.