Return of Premium term insurance. A perfect fit!
March 2nd, 2007
Life insurance on a good day is considered by many to be a necessary evil. On a bad day, just a waste of money. Consider the following on a young couple that had just received a quote for term insurance from, of all sources, an AFLAC agent. The wife and husband were quoted a whopping $200+ per month for $200,000 of 30 year term. At her age 25 and his age 31, the odds are well in their favor that they will live longer than that. That is a lot of money. $70,000 or so over 30 years.
An independent life insurance agent could present the same couple with an option of a return of premium term insurance policy. The same couple, for $250,000, would pay $250 a year for her, $19 a month and $350 a year for him, about $30 a month. Now we have already determined they will outlive a 30 year term. With this new direction they will spend about $600 a year, making their total outlay over 30 years come to $18,000.
If that’s not good enough, at that point they get their return of premium. A tax free check for $18,000. So, at the end of 30 years they can look back at the $70,000 they spent or forward to how they are going to spend their $18,000.
I won’t even go into what AFLAC wanted to sell them for children’s life insurance except to say that it was an equally bad deal. Kind of makes me dislike ducks…………….
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Entry Filed under: Independent agent, children's life insurance, insurance, insurance quotes, life insurance, return of premium term insurance, term insurance
2 Comments Add your own
1. Brent | November 8th, 2008 at 11:19 pm
not sure where you got your rates for Aflac products but using the info you gave for a 25 and 31 even for tobacco rates its $122/month and that’s adding the accidental death rider that doubles it in the event of an accidental death. its $60/month for non tobbacco rates … I’m not saying Aflac is the best choice for life for most people but what you have to keep in mind is that its a simplified underwriting product. There are no tests involved only a few underwriting questions. Its yes or no based on the app so obviously rates will be higher for such a product.
2. Hinerman | November 10th, 2008 at 1:20 pm
Ok, whatever. Why would a healthy person accept a higher rate that they will be paying for many years just because it is slightly easier. At that age paying $122 a month is just as stupid as watching a commercial about a duck.
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