Thanks for the comment. At first glance what you say makes sense, that the $52,110 you get from investing the difference on the ROP is more than the $35,400 you would get back with the ROP.

I think where our views differ is that with the ROP, at the end of 30 years, your expenses are $0 because you get it all back with the ROP. In the other case, sure you made $52,110 off of the difference, but you had expenses over the 30 year period of $21,600 for the insurance.

Does that make sense?

You said: To illustrate the cost difference between purchasing regular term insurance vs. one with the ROP ride, here are some quotes that I ran. In our scenario, I am using a 30 year old male, assuming he is in excellent health. We are going to get a quote on a 30 year term life policy with a $1,000,000 face value. Without the ROP rider, the annual premium will cost approximately, $720 per year for a total of $21,6000 premiums paid over the 30 year period. By adding the ROP rider, the premium jumps to $1,180 per year, for a total outlay of $35,400. That’s a total difference of $13,800 premiums paid ($460 per year) or a 63.88% increase.

If we are able to average 8% return over that same period, we accumulate a total of $52,110 and after subtracting the premiums were left with $30,500. Compare that to the $35,400 we would get back with the ROP rider, and we’re still in the red. If we can average closer to 10% return, then we have a greater chance for the normal policy to be more economically viable.

I am saying: I quickly read your article, and maybe I am missing something, but it seems to me that in the 8% scenario, the normal policy is already more economically viable, and your NOT in the red. If you had the ROP and had a total outlay of $35,400, over 30 years, then $35,400 is ALL you would get back at the end of 30 years. In the 8% scenario, you have $52,110 (all from your investment and got nothing back from the premiums) at the end of 30 years. So actually, you have $52,110 at the end of 30 years, which is over $16,000 more than what you would have gotten back if you had ROP. For this example, I do not see the need to subtract the $21,600 from the $52,110. It seems that at the end of 3o years, with ROP, you get back $35,400, and WITHOUT ROP, and investing the difference in premiums, you had $52,110, even though you got non of your premiums back. Please let me know if I missed something.