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New Term Life Policy Offers Money Back Feature

Imagine getting a money-back guarantee on your Term Life Insurance. Sound too good to be true? Return of Premium Term Insurance is a relatively new product that allows you to enjoy the feeling of security that comes from providing for those you love in the event of a tragedy, while knowing that you will get all your money back if the insurance is not used.

Before this innovation, life insurance was available in two forms: Term Insurance and Permanent Insurance.

Term Insurance is very affordable and easy to understand. With Term Insurance, you know exactly what the premiums will be for a fixed number of years. If you die during this time, the value of your life insurance will go to your beneficiaries, which you name at the time you buy your policy. Permanent Life Insurance, on the other hand, includes a cash-building component to build cash value in addition to the death benefit. But building cash value means paying higher premiums, so these policies are much more expensive than term insurance.

Return of Premium Term appears to solve the dilemma for many people of which type to buy. It starts out like a Term Life Insurance policy with one extra promise from the insurer—if you pay your premiums and live, you’ll receive your money back. The Return of Premium Term policy is higher in premiums than a Term Life policy, but the benefit of receiving your money back could outweigh the additional costs.

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