What is "Return of Premium Term Life Insurance" and why should I care?

In Life Insurance Selling Magazine, (June 2009) Byron Udell wrote something that I liked. He is explaining to a client how R.O.P. works.

Here is how he explains it.

”Mr. Client, here’s how it works. You set up an account and put $1,000 per year in it. The insurance company also sets up an account and they put $1 million in it. If you die any time during the 30 years, we simply switch accounts. Otherwise, if you're still here at the end of the term, you keep your account: The insurance company writes you a check for $30,000.
Of course, the “account” pays no interest, but in today’s world, a return of your money is a whole lot more important than a return on your money”

So even simply stated, if you don't die during the term of your insurance, the insurance company will return all of your payments. So you are being covered in case tragedy occurs with zero risk.

Don't Procrastinate with Life Insurance

I have a client who quoted both his parents for life insurance back in 2004. At the time, both were healthy and were looking at $250,000-$500,000 policy for the mother, and $750,000-$1,000,000 policy for the dad.

After a few rounds of going back and forth, they abandoned the idea.

In 2006, client's mother died abruptly of cancer.

In 2008, client finally decided to go ahead with the life insurance app for his dad. Declined due to abnormal liver panel. Dad died 6 months later due to extremely aggressive cancer.

This is a fantastic example of why you DON'T PROCRASTINATE with life insurance.

Got Life Insurance from your job? Think you're all set?

I just heard a story about group term insurance the other day. A man who developed cancer was so sick that he couldn't return to work. When his job ended, his group life insurance did as well. He died with out life insurance. He thought he had plenty since his employer provided his life insurance.

Most people don't realize that their group life insurance may end when their employment is up. They also don't realize that when you reach retirement age that insurance premiums are higher and the possibility of being rated higher increases.

Having group term coverage through your employer is great. But you should not rely on that as your sole source of life insurance. 99 time out of 100, it's not enough coverage anyway. Owning your own policy is the way to go. When you buy it through your employer, they own the policy and consequently get all the living benefits of doing so.

Who is life insurance for anyway?

Life Insurance isn't for the people who die. It's for the people who live.

I recently found out that my colleague’s friend was diagnosed with Cancer. He is 48 and has three very young children. He makes about $125,000 per year. His wife is a stay at home mom. A few years ago he was quoted for life insurance and he decided not to take it.

The doctor has given him about 3-6 months to live and he only has $120,000 of life insurance. This will provide his family with one year’s salary.
• Mom now has to find a job, fast. (Yes, she has to find a job quickly in this economy.)
• Will she be able to afford the mortgage payment, car payments, taxes, utilities? (Not for very long.)
• Will they have to move to into an apartment? (More than likely. Drastic change in life style)
• Will mom be able to afford to send the children to a good college without a college fund in place? (Not likely.)
• How much will daycare/after school programs cost? ($4,000-$6,000 per year, per child on average)
• Will mom need two jobs to make ends meet? (Either 2 jobs or rely on family or government assistance)

My name is Derik Tutt and I am your local Financial Advisor. I’d like to come out and meet with you and help your family prepare for events that we have no control over in life. You will sleep better at night knowing your family is well protected financially.

Derik A. Tutt
Independent Insurance Broker
InstaSure Financial
404-200-5532 (direct line)