Return of premium Health Insurance

Alsky · 06-23-2008, 09:57 AM

I caught the tail end of a commercial on the radio from Mega Life that offers a return of premium on their health products. You get a return of premium minus whatever the policy pays out as benefits when the insured reaches age 65.

Has anyone else heard about this?

I wonder if some insureds purposely won't go to the doctors just so they won't erode their refund (ROP).

What are your thoughts about an ROP rider for health insurance. Doesn't seem to make sense to me, but is probably a good "hook" for those who brag "I never use my health insurance".

blaze1x · 06-23-2008, 10:09 AM

I bet the plan is fixed so there's no way in heck anyone would be likely to stay on it for the full term. It's just a way of dangling a carrot in front of their victims and then yanking it away at the last second.

TXINSURANCE · 06-23-2008, 11:08 AM

You couldn't stay on the full term, this is not possible with the way individual carriers block their business - unless you are near 65.

This is very suspicious.

djs · 06-23-2008, 01:41 PM

Return of premium is a rider, you pay for it. Now think about how many 30 year olds want to stay on the same health plan till they are 65?

As always, you would be better off putting the extra premium $$$ in a reasonable investment account. You would come out ahead.

robliano · 06-23-2008, 02:44 PM

How can anyone even handle the rate increases over 5 or 10 years.

Also, who believes anything Mega says anyway?

TheSalesWolf · 06-23-2008, 02:46 PM

Here you client Male 45 your premium is $200. Now remember if you keep this plan and make no changes you get all these premiums back when you turn 65.

In 5 years that client would be paying $750 per month.

By age 60 probably $2500 per month.

No way anyone would stay on this plan and guaranteed they would find a loophole to get out of paying it if they did.

It's a good sales hook though.

Mr. Bill · 06-23-2008, 03:33 PM

More like a spear than a hook, eh?

somarco · 06-23-2008, 04:42 PM

Mega still promotes this tease. As others have pointed out, only a fool would buy (and keep) the plan for the ROP.

A few carriers tried this maybe 20 years ago. Can't recall exactly who but I am almost sure they are no longer in the health insurance business.

We also had Penn Mutual writing individual health insurance with a 3 yr rate guarantee in the late 70's or so.

They lost their butt on that deal.

arnguy · 06-23-2008, 05:38 PM

This idea sounds as hare-brained as a return of premium rider on a zero premium life insurance policy!

Soaringagent · 06-24-2008, 12:39 AM

Wow, that's scary.

joshril · 06-24-2008, 01:17 PM

I wouldn't be surprised if Assurant was working on something like this...