Return of Premiums

Return of premium riders are available from many insurance companies on critical illness insurance coverage. Return of premium was first available on life insurance coverage. Critical illness is a newer form of insurance available in Canada. The return of premium rider or feature is a provision that ensures all premiums paid by the insured individual is paid back to the policy owner if a claim was not made at the end of the contract or specified time period.

This return of premium rider has made the sale of critical illness in Canada easier. Many insurers are now offering a return of premium for critical illness after a 15 year premium pay period.

Individuals should base the amount of critical illness required not by taking into account a return of premium rider, but rather by a needs analysis. It is important to note that premiums for critical illness will be significantly higher on policies that have a return of premium.

Return of premium can offer individuals both, a return of the full insurance premiums paid, or a portion of premiums paid, depending on the insurance return of premium rider selected.

Return of premium can be repaid at withdrawal or expiry and in some cases at death.

According to the Canadian Cancer Society in 2011, there were an estimated 177,800 new cases of cancer in 2011. In addition, one in two Canadians will develop cancer and three out of four individuals will survive cancer. Heart attacks strike 70,000 Canadians each year and over 50,000 Canadians will have a stroke every year according to the Heart and Stroke Foundation of Canada in 2012. As well, according to Tracking Heart Disease and Stroke in Canada in 2009, nine in ten Canadians, yes 90% of Canadians have at least one risk factor for heart disease or stroke.

The Return of Premium feature returns 100% of all insurance premiums paid into the contract after a specified period of time or at a certain age provided you have not made a claim for benefits during that time.

Common Return of Premiums Riders

  • 15 year Return of Premium provides ROP any time after 15 years of paying premiums into the insurance contract assuming one had no insurance claims
  • 20 year Return of Premium provides ROP any time after 20 years of paying premiums into the insurance contract assuming one had no insurance claims
  • Age 65 Return of Premium provides ROP any time after the age of 65 provided an individual has had no claim for benefits

Individuals and families should discuss their insurance needs with an experienced life insurance agent. Critical illness insurance coverage and premiums differ from insurer to insurer. Ensure you compare pricing and features with a few insurers. Always deal with reputable and experienced financial and insurance specialists.

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