Life Insurance- Return on Premium (ROP)

[Josh Koett]

Hello BP Community,  

I took out a 30 Year Term, $100,000  policy with AAA Life Insurance.  Right now I'm paying $36 a month. Presently I'm single, no kids and took out this policy at 31 years old and I've had it for a couple years.  I thought getting  life insurance now would be cheaper instead of waiting until I'm older with a family. But the downside with my policy is losing my premium every month. ----  Recently, my agent told me about Return on Premium (ROP).  My policy would be the same except my monthly premium would increase to $56 a month, and I would get back all the money I put in at the end of 30 years which is about $20,000. --- Meanwhile, I've been thinking it over and my agent now is recommending 200,000 Death benefit  Universal Life which would be a whopping $100 a month.  After listening to Dave Ramsey, I think I will stay away from Universal Life and invest the rest in real estate.   But, should I upgrade my account to Return on Premium for the 30 Year Term policy since I'll be getting it back if I make it to my 60's.  I think without ROP all that money is lost.  Any suggestions would be helpful.  Thank you.

[Frank S.]

Josh, 

Life insurance is not for you, it's for your dependents.  Get this clear, there is nothing for "you" when you buy life insurance, nothing at all. 

Do you have anyone that needs your income? If not,  you don't need life insurance and you are wasting your money.  Life insurance is supposed to replaced your lost income to care for your loved ones. It's not an investment. It's not a price tag on your head.

The gimmicks with return of premium, universal, whole, variable, etc. are nonsense. The only insurance that makes sense for 99% of the people is Term Life with a convertible option. Any other type of insurance makes money for the agent, not for your loved ones. 

The motto goes, buy term and invest the rest, but you have to invest the rest.

Get this book

Making The Most of Your Money: Jane Bryant Quinn

or 

Bogleheads Guides to books.

If you need Term Life, get it from term4sale.com

However, read the books above first.

Best, 

F