Cashing in your term life insurance policy. Can you?
One of the main reasons people choose to buy term life insurance over other policies is because it’s a lot less expensive. The ability to save money on your monthly payments comes at a price, however, and that’s because you won’t receive any money in the way of a cash value like you would had you purchased a permanent life insurance policy. Instead, when you decide you no longer want to pay for term life coverage, you can terminate your policy by informing the insurance provider of your decision or simply by no longer making your premium payments.
So is that it? The coverage ends and there’s nothing to show for your investment of money? Depending on the term life insurance policy you purchased, you may have non-forfeiture benefits of which you can take advantage. These options are called ‘return of premium’ and, depending on the type you own, you may receive some amount of the money you paid in premiums over the years for your insurance policy. If you own a ‘return of premium’ type policy, you can cash in your life insurance coverage when you reach the end of your policy’s term.
What’s great, too, is that with most of these policies you will not only get back the money you paid in the way of premiums but also interest that was earned on those premiums. Really, if you consider this, the only difference then between this type of term life policy and a permanent policy is that you don’t have the option of borrowing money from the cash value of the policy, as no cash value exists with term life insurance.
Unless you specifically go looking for and purchase a term life insurance policy that has the ‘return of premium’ stipulation, you won’t receive any money if and when you survive your policy’s term. If losing your investment is not something that you want to chance, you may want to make this type of policy a strong consideration.
Contact us at TermLifeInsurance.com to learn more about term life insurance policies and return of premium benefits.
Can’t cash it in so find a cheaper policy.
