Answers: You pay your premium, the insurance company invests it and make money off of it, and returns your principal after 20 years.
The biggest con is that 1. it's WAY more expensive than straight residence insurance 2. you STILL do better buying straight term and investing the difference 3. once you factor within inflation, at the end of 20 years, it's worth smaller amount than at the beginning.
The biggest pro: It's much easier to market to people who are desperate at math. And the commisions are higher than straight possession.
Return of premium term rider works by guaranteeing that you catch your premiums back at the wrap up of your coverage period if you don't die or smaller number any money borrowed from policy. Advantage, you get a due free lump sum back and you are covered and capture money back unless used,unlike
vehicle insurance and others. Disadvantage, the rider makes your premium cost more. Some utter also that the premium you get wager on hasn't earned any interest during the possession. Example: A 50,000 20 year term policy beside a return of premium rider for a monthly premium of $50.00. You pay premiums for 20 years, if you're still alive contained by 20 years you get a bread refund of adjectives premiums paid, 50 x 12 x 20 = 12,000, so you have free insurance the whole time. You get hold of a portion of your money back commencing in the fifth year, and it a moment ago builds year after year, so if you decide you don't want the policy or cannot afford the policy, doesn`t matter what reason, it doesn't concern, at the end of 20 years you grasp all your money spinal column. It is like a forced stash account for ethnic group who will not save money any other channel. Downside is you pay more per month to give this feature to your permanent status policy, but for those who would not invest the difference anyway it is a good concept.