What is the Return of Premium Feature?

When it comes to choosing the right insurance plan, many people look for policies that offer value beyond just coverage. At Lonestar Financial, one advantage that stands out is the Return of Premium (ROP) feature. Traditional insurance only pays out when you file a claim. However, our policies offer a Return of Premium feature. Therefore, you’re eligible to receive your premiums back if you stay healthy and don’t need to use the coverage. In this blog post, we’ll explain what the ROP is, how it works, and why it can be a smart choice for securing your financial future.

The Return of Premium (ROP) is a unique feature found in our accident, cancer, heart/stroke, and ICU policies. Simply put, it offers a cash-back guarantee if you don’t file any claims during the policy term. Essentially, the ROP acts as a built-in savings plan. This ensures you get something back even if you never use the benefits.

With the ROP feature, you have the peace of mind that comes from knowing the money you spend isn’t wasted. On the one hand, you have incredible coverage if you ever need it. On the other hand, if you remain healthy and don’t make any claims, you can receive up to 100% refund of your premiums back. Here’s how it works.

The Return of Premium benefit is straightforward and easy to understand. Here’s how it works:

• Build Cash Value Over Time

From the start of your policy, your premiums begin to accumulate cash value. After just five years of continuous coverage, you start building a cash reserve. The longer you keep the policy active, the more cash value you accrue. When you reach the Cash Value Maturity Date (25 years of coverage or age 65), you become eligible for a refund of your total premiums paid.

• Full Premium Refund with No Claims Filed

If you don’t file any claims, you can receive a full refund of all the premiums you’ve paid. This means your dollars spent in the policy never go to waste. You get back every dollar spent! For example, if you paid $20,000 in premiums over 25 years and didn’t file a claim, you’ll receive the full $20,000 as a cash-back benefit.

• Partial Refund if Claims Were Filed

Even if you file claims during the policy term, you can still benefit from the ROP feature. In fact, the refund is simply adjusted based on the claims paid out. For instance, if you paid $25,000 in premiums and filed claims totaling $5,000, you would still receive a refund of $20,000. This ensures you get back a significant portion of the money you spent, even if you needed to use the coverage.

The Return of Premium feature offers several advantages that can make it a valuable addition to your insurance plan:

• Financial Security

With the ROP, you’re covered in two ways: First, if you need to file a claim, you receive direct cash benefits to cover medical and non-medical expenses. Second, if you stay healthy and don’t use the coverage, you get your money back. It’s a win-win situation that provides both peace of mind and financial security.

• Built-in Savings Plan

The ROP acts as a forced savings plan. In other words, it helps you build a cash reserve over time. Instead of paying premiums that you’ll never see again, you’re effectively saving for your future. Moreover, when the policy matures, you have the option to use the refunded premiums for any purpose. You could pay off debt, fund a vacation, or boos your retirement savings.

• Flexibility and Peace of Mind

The flexibility of the ROP benefit allows you to maintain your policy for as long as you need. You don’t have to surrender the policy at the Cash Value Maturity Date to receive the refund. So, you can continue enjoying the protection our policies provide while still benefiting from the cash-back feature.

If you’re looking for an insurance policy that offers more than just coverage, the Return of Premium option could be a smart choice. It’s ideal for anyone who wants:

• Extra Value from Their Premiums: Instead of viewing premiums as a sunk cost, the ROP feature lets you see those costs like an investment that can be recuperated later.
• Peace of Mind: Your premiums never go to waste whether you use the coverage or not. This provides an added layer of financial security.
• Long-term Financial Planning: The ROP fits well into a comprehensive financial plan because it acts as a form of savings while simultaneously providing robust protection.

The Return of Premium is a unique feature that ensures you get value from your policy whether you need to make a claim or not. It’s a feature that combines the best aspects of insurance coverage and savings. Thus, the ROP is a versatile choice for those seeking financial protection and peace of mind.

If you’re interested in learning more about how the Return of Premium option can benefit you, contact us today for a free consultation. Let’s explore the right policy to fit your needs and help secure your financial future.