Despite a sharp decrease in policy costs over the past 30 years, millions of American adults are without needed life insurance.

When it comes to purchasing coverage, "Price is almost never the driver. It's imparted entirely by a sense of urgency," says David Woods, president of the

Life and Health Insurance Foundation for Education,

or LIFE, nonprofit insurance education group. It usually takes an event, such as a neighbor's heart attack or a death in the family.

So insurers look for more appealing products to attract consumers.

One of the newest ones attracting lots of publicity is the ROP, or return on premium, term insurance.

"You don't have to die to win," says Byron Udell, CEO of Wheeling, Ill.-based

AccuQuote,

a large independent brokerage firm that helped bring the product to market three years ago.

By paying more for ROP than regular-term insurance, which covers a set period of time, but far less than permanent insurance like whole or universal life, consumers who stick with the product for its full 15-, 20- or 30-year term recover all the premiums they have paid. The leading insurer in the field, says Udell, is

AIG

(AIG) - Get Report

. Other companies offer ROP as a rider to standard-term policies.

As an example, a healthy 43-year-old man today would pay about $1,275 a year for a 30-year, level-term policy, and $1,620 for an ROP level-term policy, says Udell. The much pricier permanent insurance policy, by comparison, would run about $3,800 a year.

If the customer lives the full 30 years and pays the entire traditional-term policy, he would expend $38,250 and not recover any of it. With the ROP, he would pay $48,600 over 30 years and get all of it back -- tax free to boot because he'd already paid taxes on it to begin with.

The question arises, could the customer earn more by investing the difference between the cost of the two different term policies?

If the 43-year-old customer opted for the standard term and invested the extra $345 a year he would have had to pay for the ROP and managed to achieve an 8% annual return, he would have roughly $42,000 at the end of 30 years. Assuming a combined federal and state tax rate of 35%, he would keep about $27,435, compared to $48,600 with the ROP.

The ROP policy is less attractive to consumers at shorter terms because of its steeper price. With a level 20-year term, the same 43-year-old man would pay $655 annually for traditional-term life, but $1,875 for the ROP policy. For a 15-year term, the yearly cost for traditional is $505 vs. a whopping $2,525 for the ROP.

Udell says ROP policies are popular because "it feels good to get all the money back, but it's still cheap like term

insurance."

Of course, insurers are counting on customers to drop the policies before the terms expire, as most eventually do.

David Archambault, a San Diego independent insurance broker with Showley, Archambault & Alexander, says he's never sold an ROP policy.

"Why do you want to pay more to an insurance company than you have to?" he asks. "There are probably better places to take that same amount of dollars." He believes his clients would be better off putting the difference in tax-deferred pension plans.

Woods, of the insurance foundation, is also skeptical of the ROP insurance. "It's a marketing gimmick," he says.

He believes people need the option to convert to permanent coverage rather than be stuck with term. Customers might not realize in their 30s and 40s that they still want or need coverage as they age. "It's rare that people are eager to drop insurance at age 65," he says.

Whose Life Is It Anyway?

Life Insurance Checklist

If you find a good deal on a replacement policy, never cancel your old one until the new one is firmly in place.

In an uncertain job market, have personal, portable life insurance in addition to the group policy provided by your employer.

Use the Internet or independent brokers to shop around for the best prices and the best fit.

Some insurers are more lenient than others about certain health problems or lifestyle choices, such as scuba diving.

Having them feel locked into term because they don't want to lose the money they've already sunk in makes the ROP a "dangerous product," Woods says.

Consumers should remember that they have some clout in the marketplace because life insurance costs have been falling for years. For example, 10 years ago, the typical rates for a nonsmoking 26-year-old man on a $1 million, 10-year term policy ranged between $780 and $1,600, according to AccuQuote. In 2004, the same man, 10 years older and in good health, could buy the same policy for about $300 a year. (For those who travel abroad, particularly to dangerous places, however,

policies don't come cheap, if you can get them at all.)

The main reasons for the decline include the increasing longevity of Americans -- making them less risky to insure, the heightened efficiency of insurers through computers and the emergence of consumer comparison shopping, particularly on the Internet.

The number of adult Americans owning life insurance, however, has dropped from 70% in 1984 to 61% today, according to LIMRA International, a Windsor, Conn., insurance and financial services research association. Fewer agents are selling policies at the kitchen table, while many companies offer insurance as an employee benefit, providing insurance to two out of three adults who have coverage.