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Stephen Said:

c. Life insurance companies must pay administrative costs and sales representatives' commissions; hence, the e?

We Answered:

Because life insurance isn't an INVESTMENT product. You don't buy it, looking for a RETURN on your money.

It's a DEATH planning tool. You buy it, in case you DIE.

Morris Said:

I'm buying critical care insurance, do I want a return of premium rider or just reg. critical care insurance?

We Answered:

Return of Premium rider is not an investment. A Return of Premium rider basically gives you a money back gauratee of sorts where if you don't make a claim, they will give you all or a portion of the premiums paid back.

What your decision boils down to is whether you honestly think you will get a covered illness or not. For myself personally, All 4 of my grandparents and my father have all had cancer including hereditary types. I am very certain that I will get cancer at one point in my life if the other covered illnesses don't get me first. I elected not to get Return of Premium becuase it's just adding the my cost, when I know I will make a claim anyways, so why not just make it as cheap as possible. IF you have a fairly healthy family history and feel you are amongst the few that it won't effect, paying the extra couple dollars a month will make it worth while to get the money back.

Also, those that tell you to NEVER use insurance as in investment are typically either liars or uninformed. The tax sheltering benefits of insurance products (depends where you live...) can be a great advantage to many people. Your situation has nothing to do with using insurance as an investment though.

Alma Said:

Besides AIG who does Return of premium?

We Answered:

Many do...ING, Western Reserve, GE, etc.. If you use the tool on my site you'll see a bunch. It requires no personal information to use and quotes ROP Term for 15, 20 & 30 years.

Jacob Said:

If I close a life insurance policy do I have to report the return premium on my income taxes?

We Answered:

not the money you have paid for premiums, but the interest made,, yes
so, any return over and above the premiums you paid on the policy is taxable,, the insurance company will send a 1099 with those amounts on it

Hector Said:

My mother received money from a "return of premium" on an insurance policy. Are "Return of Premiums" taxable?

We Answered:

It would only be taxable if you had taken a tax deduction for it in a prior year. Health insurance comes to mind as one possibility there, as would a business policy for which a business expense deduction was previously taken for the premium. Otherwise if this is for a personal non-deductible insurance policy then a return of premium has no tax consequences.