The policy holder chooses a predetermined number of years, usually up to 30. This period is known as the term, and if the policy holder does not die within that time, then the premiums are returned, less any administrative fees.
This type of coverage is designed for individuals who would like the added financial protection of life insurance but are uncomfortable with the idea of premiums continuing to accrue with no benefit to their families.
Term insurance with the return of premiums can provide the policy holder with peace of mind knowing they’ll get their money back if they live past the specified term.
Additionally, some people buy it because they want to provide a financial safety net for their family while also having some assurance that if they live past the life of the term coverage, they will get the premiums back.
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