Early in my career, I met with someone who had a disability insurance policy cancelled due to nonpayment. This cancellation (or lapse) occurred due to no fault of the policy owner. To make a long story somewhat short, this guy – a professional musician with a symphony orchestra — moved to a new home and had given the insurance company the address change with plenty of notice. His premium payment was set up on a quarterly direct billing mode.
I am often asked my opinion of Return of Premium life insurance — ROP for short. Like most products on the market, ROP can make sense for some and not for others. When ROP products were first offered several years ago, I heard Clark Howard offer his opinion on the product and I was a little suprised by what he had to say. He said that it was a good move for those people who are very diligent about paying their premiums on time and plan to keep the policy for the full term period.
