Did you know that about 60% of people are covered by some type of life insurance in the United States? If you recently purchased life insurance or are looking at different options and are wondering “do you get your money back at the end of a term life insurance?” you are in the right place.
Keep reading to learn more about term life insurance.
Do You Get Your Money Back at the End of a Term Life Insurance Policy?
When you have regular term life insurance policies the answer is a simple “no.” But, if you are interested in getting more protection for your family you do have other options.
You can buy a permanent policy that never expires. This means that if you stay current with your premiums, your beneficiaries will receive the death benefit once you pass away.
How to Get Money Back?
Another option is to purchase a return of premium term policy. This type of policy will give you a refund minus some fees if the policy expires while you are still alive. You will get back what you paid for without interest and without paying taxes on it.
An advantage of this policy type is that the premiums are paid to you if you outlive the policy term, or if you die during the term the policy will pay out a death benefit.
Another pro is that the premium is like a savings plan that forces you to save money every single month. A third advantage is that the policy will build cash value and you will be able to take out a loan against it after some time.
Keep in mind that this option is a lot more expensive than a normal term policy because the money gets returned. Some people would rather save the difference in a different savings account instead of going with a higher life insurance option. You can also go into an investment option where you will have a much higher return on investment.
Canceling the Policy
If you have term life insurance already, you can’t get your money back after the policy expires. If you decide to cancel during the policy’s free-look period by law you will receive a refund.
If you cancel the policy mid-term you won’t have to continue paying any future premiums but you will forfeit all of the premiums you have already paid towards the policy. If you were paying your premium a few months out and you cancel before they cover you those months, you will get a refund for the months you won’t be covered.
Feeling Like a Term Life Insurance Pro?
Now that we answered the question “do you get your money back at the end of a term life insurance?” you can make a decision of whether or not term life insurance is for you.
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