Insurance Blog, Home Insurance Blog, Life Insurance, InsWeb Insurance Blog

Do you ever really think about the money that people spend each month for life insurance and the irony surrounding it? Think about it, you pay each month into something that will never benefit you personally. If you outlive your term, then you paid all that money "for nothing," and in the event you don't, then you aren't around to collect. Well, if this scenario just doesn't seem to sit well with you, then you may be happy to know of a different kind of life insurance policy called: a Return of Premium Term Life insurance policy.

Return of Premium (commonly known as ROP) policies, while a bit more costly, offer the benefit of returning your paid premiums if you are still living when the policy term is up. They also provide the same benefits of a term life insurance policy; namely offering you the choice of your term length and policy amount.

Originally, ROP term life insurance was designed only to refund the policyholder at the end of the chosen term (for example, 20 or 30 years) if the policyholder outlived the term. As the product has matured, there are now several variations that allow policyholders to receive partial refunds by canceling the policy several years into the term. For example, if a policyholder selects a 20-year ROP product, he/she may be able to receive a 50% refund for paid premiums at the end of the 15th policy year. Graduated refunds may be received down to the sixth policy year; no refunds will be returned if the policy is cancelled before the end of the fifth policy year.

ROP term life insurance offers consumers options. Price-wise, it usually falls in the middle of less expensive pure term life insurance products, and more expensive (and often confusing) permanent or whole life insurance products. It offers the same benefits as traditional term life insurance, while offering consumers the added bonus of getting their paid premiums returned to them if they outlive their policies; or receiving partial returns if they find they have a greater need for the money partially through the policy’s term.

InsWeb’s ROP term life insurance offerings are most competitively priced at a 30-year term, where a healthy 35 year old male can get a $500,000 ROP policy from one of our top companies for as low as $68.72* a month (compared to $44.63 a month for a comparable traditional term life insurance policy). The difference between the 2 premiums is only $24.09 a month; however at the end of the 30-year ROP policy the owner could get back up to $24,739.20! And according to industry averages, this rate would still be significantly lower than purchasing a permanent life insurance policy, and again offers the consumers the benefit of choice offered by term life insurance.

*Quotes based on a composite of participating carriers, which have at least an A- rating by A.M. Best. Rates effective as of 1/31/2006.

InsWeb Life Insurance Learning Center
Learn how much coverage you will need to provide financial security for your loved ones when you're gone. InsWeb's quick and easy way to find affordable term life insurance.

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Oh my goodness, I just hit that car!” “How much is this going to cost me, and what’s going to happen to my insurance?” In the heat of the moment, these are the instinctual thoughts of any driver who’s had the unpleasant experience of a fender bender. Even the smallest and most innocuous auto collision can have lasting financial repercussions — regardless of fault. What’s a driver to do?

There is an abundance of misinformation floating around the Internet that will convince you why you should pay out-of-pocket for small fender benders — especially if you have any previous accidents or moving violations on your driving record. At the scene of a collision, don’t be so quick to financially resolve the accident by writing a check or accepting the other driver’s available cash on hand.

There is a reason that your state requires a certain level of car insurance: car repairs always have unexpected costs and personal injuries sometimes take unforeseen turns towards chronic physical injury. If you choose to not report an accident to your insurance company, you are taking an uncalculated risk that you are probably not prepared for. If the other driver chooses to sue you months later, your failure to report the accident might cause your insurer to refuse to honor the policy. Imagine the financial and legal challenge of taking on an insurance company all by yourself.

Auto accidents are expensive and inconvenient; however, having the lowest possible deductible probably isn’t going to make a difference in the long-term costs of such an event. Instead, you should consider increasing your deductibles to lower the overall cost of your premiums. It’s one of the best ways to save on your car insurance. Yes, a collision will be a little more expensive, but you’re probably not going to experience enough accidents to justify the forgone savings. If you’re a safe and responsible driver, save on your overall premium, not on the out-of-pocket costs in an accident.

As with anything, preparation is the key to successfully navigating the administrative headaches of a fender bender. Always have a pen and paper readily available next to your proof of insurance. You’ll want to collect the names and addresses of all drivers, passengers, witnesses, and law enforcement officials involved; in addition to license plate numbers, the make and model of each car, driver’s license numbers, insurance information, and as much scenario detail as possible. There are two points of wisdom that strongly support any resolution that most people overlook: 1.) Never admit fault, and 2.) Have a disposable camera handy to take undisputable images of the scene. In any type of auto accident, everything happens in a flash and “hindsight is 20-20”.

If a fender bender has bruised your driving record and you are suffering from what seems to be unreasonable premiums, don’t be a prisoner to your insurance company. There are companies that specialize in insuring high risk drivers with reasonable rates. To find them you must shop around and compare multiple quotes from multiple companies. The same policy can vary by hundreds of dollars from company to company.

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Beyond using homeowners insurance as financial protection against disasters, many use it like a checking account to alleviate the small “fix-it” burdens of owning a home. Although you promptly paid your premium, and your claim is completely legitimate, be aware that filing a claim can affect how much you may pay for insurance in the future and can severely limit the selection of companies that will be willing to cover you.

Quality homeowners insurance companies are there when you really need them; however, they don’t like claims—it impacts profits. With much controversy, some carriers are becoming more unwilling to insure homes with any claims, regardless of the extent of the damage. Consequently, it’s not unheard of for the policyholder that made a claim to experience dramatic increases in premiums or to simply receive a heartless non-renewal notice. Unfortunately, given the recent natural disasters, the affordability of homeowners insurance has become a privilege for those who don’t make claims.

Aside from the consequences of making a homeowners claim, understand the fundamental purpose of homeowners insurance: it’s intended to protect you from truly devastating financial disasters that disrupt your quality of life. From a very simplified perspective, homeowners insurance is better suited for a tree through a roof rather than a branch through a window. After accounting for rate increases and the time needed to find a new carrier, small claims can easily exceed the cost of the actual damage. Prepare for the decision of filing a claim or paying out-of-pocket ahead of time by determining the amount you are willing to pay yourself. Deductibles are an easy place to start with this exercise. If you are able to increase your deductible from $500 to $1000, then the decision to make a claim can be as simple as: “Is the damage more expensive than my deductible?” Incidentally, increasing your deductible from $500 to $1000 could save you up to 25% on the price of the premium, so if you are really prudent, you could put those savings away in an account to pay for a small claim in the future.

Just as your driving record shows all of your accidents and tickets over a period of time, your home has a similar record of historic homeowners insurance claims. Known as CLUE (Comprehensive Loss Underwriting Exchange), most insurance carriers subscribe to this database in order to maintain and verify underwriting information. In the same manner that your driving record can affect your desirability to a new employer, insurance claims on your home can travel far beyond just the price of insurance. If you ever decide to sell your home, prospective buyers are likely to review the claims history since they will inherit its “less than perfect” record if they decide to purchase the home.

Although it’s always wonderful to save money, paying out-of-pocket for what seems like a minor claim is not a hard-and-fast rule. When the event that affects your home involves liability for another party, where the smallest possibility of a lawsuit looms, protect yourself by notifying your insurance company immediately. Even if the person injured on your property passively excuses the situation, be aware that you are still subject to the risk of his/her long-term injury and corresponding lawsuit.

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