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Can someone please explain to me how does the Return of Premium work? does the client get everything back at the end of the term? I'm thinking there is more to it?
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Can someone please explain to me how does the Return of Premium work? does the client get everything back at the end of the term? I'm thinking there is more to it?
Yes, they get 100% back if they keep it the full term. They are paying extra in for that feature. It's for people who don't like the thought of paying in money purely for the insurance benefit.
The downside is; if they cancel the contract early, they get a pro-rated amount back (not 100%) and if they die and collect the death benefit, they paid much more for the coverage than they needed to.
If they just bought the cheapest term and invested their own money they will USUALLY be better off (not always because some investments perform poorly.)
It has a place but it's definitely not for everyone.
Can someone please explain to me how does the Return of Premium work? does the client get everything back at the end of the term? I'm thinking there is more to it?