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Return-of-Premium Term-Life Insurance
Tuesday, April 10, 2007provided by
Q: Is the return-of-premium term-life-insurance product as well-established and reliable as a typical term policy? -- A.R.
A: Return-of-premium term-life-insurance policies have become increasingly popular recently, accounting for 10% to 15% of new term-life-insurance premiums in 2006. More than 20 insurers offer them, up from a handful five years ago.
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The least expensive $1 million, 30-year-term policy with a return-of-premium rider for a 40-year-old man in California is roughly $2,160 a year, compared with $1,240 for the least-expensive regular term policy. That works out to roughly a 5% return on the extra $920 in premiums, says Glenn Daily, a fee-only insurance planner in New York.
If you let the policy lapse generally in the first five or six years, you may not get any of your premium back, and term rates could have declined in the interim. As for reliability, the policy should be as sound as the insurer offering it. Check with A.M. Best, TheStreet.com ratings (formerly Weiss Safety Ratings) or Fitch Inc. for ratings on insurers.
Write to M.P. McQueen at mp.mcqueen@wsj.com
Rates
See today's average rates across the country.
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Loan Type Today Last Week 30 Year Fixed 5.80% 5.91% 15 Year Fixed 5.52% 5.62% 1 Year ARM 7.65% 6.13% 30 Year Fixed Jumbo 7.15% 7.13% 5/1 ARM 5.82% 5.94% 3/1 ARM 5.75% 5.87% Source: Bankrate -
Loan Type Today Last Week $30K Home Equity Loan 7.64% 7.60% $50K Home Equity Loan 7.25% 7.25% $75K Home Equity Loan 7.26% 7.26% $30K HELOC 5.29% 5.17% $50K HELOC 4.90% 4.81% $75K HELOC 4.91% 4.81% Source: Bankrate -
Loan Type Today Last Week 36 Month New Car Loan 6.75% 6.76% 48 Month New Car Loan 6.80% 6.53% 60 Month New Car Loan 6.82% 6.55% 72 Month New Car Loan 6.44% 6.44% 36 Month Used Car Loan 7.13% 7.13% 48 Month Used Car Loan 6.93% 6.82% Source: Bankrate -
Card Type Today Last Week Balance Transfer 10.31% 10.03% Low Interest 11.01% 10.97% For Bad Credit 13.02% 13.12% Cash Back 11.47% 11.46% Business 11.10% 10.91% Airline 12.75% 12.69% Source: CreditCards.com
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