Life Insurance Spartanburg SC offers peace of mind for your loved ones when you die. It helps pay off debt, cover funeral expenses, and provide an income replacement.
It’s important to regularly review your beneficiaries to make sure they match your family situation. You can learn more about calculating your needs with the help of a financial professional.
Term life insurance gives you protection for a specific period. It can last 10, 20 or 30 years, and you choose the length that fits your needs and budget best. The death benefit is income tax-free, and you can even get a lump sum payment if you die during the term. After the term expires, you can renew it (at a higher rate, depending on your age) or opt for another policy.
You may be able to convert your term life policy into a permanent policy without having to undergo full underwriting, but the amount of the death benefit and your premiums will change. Some companies offer a rider that allows you to withdraw some of your death benefit early in order to pay for care that isn’t covered by insurance.
If you are interested in a permanent policy, whole or ordinary life policies offer a death benefit and a savings component that builds up on a regular basis. You can borrow against the cash value, and it may earn a money market interest rate. Some of these policies also allow you to alter your premium payments after a certain amount of time passes, as long as there are funds left over in the savings component.
You can list one or more beneficiaries on the application regardless of which type of policy you choose. The beneficiaries receive the death benefit when you pass, and they can use it to pay your debts or other expenses. It is a good idea to consult a financial adviser before making the final decision on which life insurance policy to purchase.
Whether you choose term or whole life, most experts agree that it’s important to have life insurance. It provides peace of mind knowing that your loved ones will be financially protected if the worst happens, and it’s less expensive than you might think. The most important thing is to find a plan that fits your needs and budget, and make sure that you keep it up by making your premium payments on time. If you miss a payment, most companies will give you a grace period, typically between 30 and 90 days.
Whole life insurance is one type of permanent coverage, which means it’s designed to last your entire lifetime—as long as you continue paying premiums. It’s typically more expensive than term life insurance, but it provides benefits that other permanent plans don’t offer, such as guaranteed level premiums and a savings component that builds cash value over time.
A portion of each premium payment goes into your policy’s cash value account, which is similar to a savings account with a fixed interest rate over time. You can access this money through withdrawals or loans, but keep in mind that doing so could reduce your death benefit amount. Some whole life policies also offer a dividend, which is an additional cash sum that you can use or put toward your next premium payment.
Since it’s designed to cover your entire lifespan, the death benefit is set for a specific dollar amount at the beginning of your policy. This isn’t to say you can’t change the death benefit later in your life, but it should be considered an important factor when comparing different policies.
You can compare whole life policies by the coverage amount (or death benefit), the premium, and the rate of growth for the policy’s cash value. When comparing these factors, it’s important to look at the total cost of a policy, which includes the premium and any commission fees that might be included in your quote.
Another option is guaranteed issue life insurance, which is a form of whole life insurance that’s designed to cover final expenses and doesn’t require a medical exam. It’s a good option for people who may not be in the best health but still want to be covered for any unexpected expenses they might face in their final years.
Whether you choose a whole life policy or another type of permanent coverage, be sure to designate contingent beneficiaries. These are folks who will receive your death benefit if all primary beneficiaries die before you do. It’s also a good idea to review your beneficiary list annually to make sure it reflects your current wishes.
Unlike whole life insurance, variable universal life (VUL) and variable universal life (VVUL) policies allow the policyholder to invest his or her cash value in a variety of subaccounts. This flexibility allows the investor to earn more than a traditional whole life insurance policy potentially, but also comes with increased risk, as investment performance will directly impact the death benefit.
These investments will also have a direct impact on the amount of interest your policy accrues. While a whole life insurance policy earns a fixed rate of interest, a VUL or VVUL policy will likely pay higher returns because the cash is invested in equities. However, a stock market crash can result in a significant decrease in the value of your cash account and could even cause your policy to lapse.
In order to keep your policy in force, the cash value must be sufficient to cover the cost of the premium payments. This means that if your cash account falls below the necessary level, you will have to either increase your premium or make additional investments to maintain the policy.
A key aspect to consider is the fees associated with a variable life or variable universal life policy. These fees can include a variety of charges such as transfer fees, fee-based investment options and ongoing policy fees. It’s important to thoroughly review the prospectus that comes with any policy you are considering, as these documents spell out all of the policy’s fees and expenses.
The prospectus will also list the underlying investment options and the potential return on those investments. Suppose you are considering a variable life or VUL. In that case, Hayes-Blocksom suggests that you ask your financial professional about the history of those options and whether those funds have performed well in the past.
Always choose a life insurance policy for the coverage that best meets your needs, and avoid picking a policy based on quoted premiums or projected asset growth. Instead, consider how much coverage you actually need and compare that to the alternatives, such as term life insurance, which offers a level premium and a guaranteed death benefit.
Unlike whole life insurance, which has an automatic premium increase each year, UL policies allow you to adjust your premium, coverage levels and cash value. The flexibility of these policies makes them often less expensive than whole life coverage, but you should carefully manage your policy to ensure you have enough money to pay premiums and avoid any outstanding loan amounts that eat into the death benefit.
If you are a person who needs to plan for long-term financial obligations and want the added peace of mind that comes from knowing your death benefit, whole life insurance is a great choice. Term life insurance is an alternative for people who are looking to cover short-term financial obligations.
In addition to a guaranteed death benefit, universal life insurance (UL) provides an investment savings element and loan options. It also allows you to change the death benefit and premium, within certain limits, as your life insurance needs evolve.
You can choose whether your beneficiaries receive only the death benefit or the death benefit plus the accumulated cash value. Be aware that a UL policy with the first option will eat into your death benefit, while one with the second option will not. In either case, it is important to have enough cash in your account if you decide to stop paying premiums because otherwise you will need to make up the difference or the policy will lapse.
Depending on the insurer, you may be able to choose an indexed UL policy, which tracks an index such as the S&P 500, or a variable UL policy, which offers a range of interest rates from guaranteed minimums to higher market-based returns. Some policies even offer the option to combine both.
The flexibility of UL insurance makes it an appealing option for many. However, it requires more oversight than whole life and the death benefit is not always guaranteed, so it’s important to talk to a professional to understand how your specific policy works. Our agents can help you decide if a UL policy is the right fit for your needs.