Cash back on a Term Policy

A life insurance company advertised a "cash back" if there is no claim under its term insurance plan.

This is how the plan works:

* the premium for the term insurance plan is, say $X a year
* for the cash back plan, the insurance company will charge $Y, which is probably charge 3 or 4 times of $X
* the difference between $Y and $X is invested to produce the cash back benefit to be paid on the end of the term.

Is this a good plan? You should consider the following:

* what is the return on the premium for the cash back benefit
* do you get a cash value, if you discontinue the plan during the term.

Lesson: Generally, it is better to avoid a "bundled" or "lock-in" product, unless the terms of the product are designed to be fair to the consumer.