The return-of-premium feature on Critical Illness policies gives the insured the option to get all of the money if he or she remains healthy.
We recently interviewed LSM Insurance Critical Illness specialist Andrew Burdi to get his take on the main on the Return-of-Premium option offered on Critical Illness coverage.
Advantages Critical Illness gives the insured the option to have important protection and at the same time invest some extra premium dollars that can earn an attractive rate-of-return when compared with alternative investments.
Andrew suggests that you should consider taking a small portion of their investment dollars and put it into a return-of-premium feature on their Critical Illness Coverage. He says the internal rate of return can be anywhere from 8% to 14%. Generally speaking, The younger the insured’s age, the higher the rate -of-return.
Disadvantage – One downside Andrew reminded us of is if the insured waits too long to access the money from the return-of-premium feature, the rate of return will erode due to the time value on money.
He suggests the sweet spot for a return-of-premium policy is the 15th to 18th year that you have it.
For more details on Critical Illness insurance, you can contact us at 1-866-899-4849 or visit our Critical Illness Quotes Page.
