Free Homeowners Insurance? Perpetual Insurance Can Make you Money as it Protects Your Home


Zack Habanero

Perpetual homeowners insurance is not free, but the benefits can make you enough money to make you think seriously about using it to protect your home.

For those who have enough cash on hand, a type of homeowner s insurance known as perpetual insurance may just be the thing you ve been looking for. This type of homeowner s policy is written in a way that it does not expire it just keeps renewing itself and exists for perpetuity.


How does it work? The insured deposits money with the insurance company, for the entire life of the risk. This money is called deposit premium . The amount of the deposit premium is quite high usually about ten or more times higher than the cost of an average, annual premium for a one-year homeowner s policy. But once in effect, the policy stays in force, without any cancellation. It simply rolls over from year to year.

In order for this to be a viable option for the insurance company, the amount the insured deposits with the insurer must obviously be enough so that the insurer can invest the money and make enough from the investments to be able to cover any losses and operating expenses it incurs. The insured receives some benefit from the arrangement, including enjoying the convenience of not having to worry about paying renewal premiums each year and/or not having to shop around for coverage year after year. No direct interest is paid to the insured on the money deposited with the insurer, but the amount you save year after year is, in fact a form of tax free interest.

For instance; Say your yearly premium is $1,000 and the company requires you to pay $10,000 for the policy. You can cancel any time, so let s say you cancel at the end of the first year. You have saved/made $1,000 and you get your whole $10,000 back. So, in effect, you made 10% interest on your investment. That is pretty good.

This is a form of homeowner s insurance that you don t really hear of too often, most likely due to the high outlay of money required for such an arrangement. But if you have the money and are willing to pay for the convenience, you should ask a South Carolina insurance agent about it.

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