Recently, the Business Times reported that a particular mortgage reducing insurance with a premium refund sold very well for over the last 4 years. According to the newspaper report, the product was well received for the first 9 months of this year despite the slowdown in property market. So, how does such product work? According to the report, for a 40 years old non-smoker, a $1 million sum assured 20 years coverage cost $5,847 a year in premium. However, a plain vanilla mortgage reducing term insurance (with no premium refund) would cost $1,750 a year. If nothing happens at the end of the coverage period, the entire premium is refunded. I assume the premium is refunded without interest. This works out to be 20 x 5847 = $116,940. However, if something happens during the coverage period, the protection value is paid out and I assume none of the premium ......