Rather than a long drawn-out post about this type of product I thought I'd post some common Questions and Answers about the ROP. If you have further questions, reach out to me!
ROP - FAQ's
1) Can I really get all of my premiums back? Yes, with a properly designed ROP you can get all of the premiums you paid into the policy returned to you.
2) How long do I have to own/pay the policy? Many companies require a time period for the full return of premiums. This means that if you stop the policy a month early, you get nothing. Avoid these types of policies. A well designed ROP policy will provide some premium return from around the 10th year onward.
3) Can I attach riders to an ROP like other policies? Yes, with a well designed policy you can add appropriate riders such as Guaranteed Purchase Options, Waivers, Accelerated Death Benefits, and more. Not all companies allow this so talk to your agent.
4) What if I need the insurance coverage for longer than the original term? A well designed ROP will allow you the option of continuing payments to keep the policy in-force. This isn't the case with all carriers so talk to your agent.
5) Are ROP policies expensive? The short answer is no. The long answer is that it depends on your definition of expensive. I once bought a DVD player at a local grocery store for only $20. That DVD player lasted almost a week so I had to go and purchase another for $60 but it lasted for about 10 years. Which one was more expensive? ROP premiums are about 3-5 times the cost of Term Insurance but at the end of 20 years with Term you will have had coverage but nothing to show for it. At the end of 20 years with an ROP you will have had coverage and all of your money back.
Example: Male, 30 years old - $500,000 death benefit (Standard Non-Tobacco)
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