A term insurance policy, broadly speaking, refers to a product which offers only pure risk coverage and no maturity or cash benefits. There are however hybrid term insurance plans available, which also offer the benefit of "return of premium" in case the policyholder were to live through the tenure of the policy or wish to cancel it after enjoying a period of coverage.

The question is "should one go in for a pure term plan or a term plan which offers a return of premium" To help you make up your mind consider this.

Let's take the following example:

·        Male - age 40, non smoker

·        Coverage amount: $1,000,000

·        Coverage period: 40 years.

Let's assume there are three options available in the market, A, B and C.

·        Company A offers a 10 year renewable pure coverage option

·        Company B offers a 20 year renewable pure coverage option

·        Company C offers a level term policy alternative with "return of premium".

The table below indicates the annual premium for such a policy for the individual. Also mentioned is the total cost of the coverage over the 40 year period.

 The assumption here is that the life insured lives through the 40 year coverage period.

While Company A and B start off with a modest annual premium, as you renew the contract through the coverage period the price increases and ends up averaging more then the level cost option of Company C.

For the life insured in this example there would be no maturity or cash benefits if he were to take a term insurance policy from either company A or company B. However, if the policy were to be taken from company C, all the premiums paid during the term of the policy would be returned and more, as a maturity cash benefit tax free. In fact, this return of premium is even more amazing when we look at the available "return of premium" or cash benefit throughout the life of the contract.

Finally, it also important to know that if you want to continue this contract for the rest of your life you can without any additional premium.it is 100% fully paid up Guaranteed, and worth $1,000,000.00 Tax Free. The maturity benefit continues to go up the longer you live as well, all fully 100% guaranteed by the insurance company.

So before you say yes to low cost term insurance, consider why you need the coverage, how long you are likely to have the policy in force.and then remember to call Barrons.

We will work through all the options with you and find a solution that is perfect for your situation.GUARANTEED

This example is for illustration purposes only, while every attempt has been made to ensure the accuracy of this information Barrons or its affiliated companies cannot be held liable for errors or omissions. Actual numbers at time of illustration may vary.