Life Insurance Anderson SC provides peace of mind that your loved ones will be financially taken care of if you die. It can be used to pay off debt, cover funeral expenses and other end-of-life costs or supplement savings.
A life insurance policy pays a lump sum to a designated beneficiary upon death. There are several different types of life insurance available.
Term life insurance offers simple protection for a set period of time – 10, 15, 20 or 30 years. It provides a death benefit to your beneficiaries, tax-free, if you die during that period. Premiums remain level throughout the term, although they may increase if you renew or convert to a permanent policy. We can help you calculate your needs and find a coverage solution that fits your budget.
We offer both traditional term and guaranteed issue policies. Guaranteed issue policies are less expensive because they don’t require a medical exam or ask any health questions. They also generally pay a lower death benefit than traditional term policies.
Traditional term insurance requires a medical exam and asks several health-related questions, but can still provide the same coverage as guaranteed issue policies for significantly lower premiums. The underwriting process can also vary, depending on your health and lifestyle factors.
Some people decide they no longer need life insurance once their term ends, but if your circumstances change later, it may be more cost-effective to renew the policy at a higher rate than you would have paid if you terminated it early. Plus, many insurers will allow you to return the premiums you’ve paid and cancel the policy if you don’t renew at the higher rate.
Whole life insurance is more complex and costly than term, but it can give you benefits that last for your entire lifetime. These include a buildup of cash value that you can borrow against or use to help pay premiums, as well as an opportunity to earn annual dividends.
We offer a range of whole life insurance products, including variable universal life and whole life with an accelerated death benefit. Variable universal life allows you to manage the policy’s cash value through investment choices, which can have a positive or negative impact on the death benefit and premium. Whole life with an accelerated death benefit lets you access a portion of your death benefit in exchange for a reduced premium. You can learn more about these and other options in our Financial Education Hub.
Whole Life
A whole life insurance policy provides coverage for your entire lifetime. While it tends to cost more than a term policy, the coverage is permanent and may help protect your family from financial hardship when you die. Whole life insurance policies also accumulate cash value that you can borrow against or withdraw from at any time. This cash value is tax-deferred and can be used for any purpose you choose, such as a down payment on a home or additional retirement income.
With a whole life policy, part of each premium payment goes toward the death benefit and fee coverage while another portion is set aside to build your predetermined cash value. These funds are invested by the insurance company and grow on a tax-deferred basis until you withdraw them. Withdrawals are typically treated as a return of premium, and any amount you withdraw will be deducted from the death benefit.
In addition to the cash value component, many whole life policies offer a guaranteed rate of interest on your investment savings and can earn dividends, which you can receive as a credit on your premium or use to reduce the cost of your policy. You can also borrow against your cash value, but any outstanding policy loans or accrued interest will decrease the death benefit and cash value.
You can add riders to your whole life policy to increase the amount of death benefit coverage or access the cash value while you are still alive. The type of rider you choose will depend on your individual needs and goals.
If you’re a younger person who needs to plan for your eventual passing, whole life insurance may be an option to consider. However, it’s important to take a look at all your options and speak with a qualified financial professional before making any decisions.
While most people can’t afford a whole life policy at a young age, some specific situations might make this option a good choice. It’s important to work with a qualified financial professional to find the best fit for your lifestyle, needs and budget.
Variable Life
Like whole life insurance, variable life policies have a death benefit and cash value that grows over time. However, instead of investing the money in fixed assets, the policyholder can choose a variety of investment options. Typically, this includes mutual funds. The performance of these investments will determine how much the policy’s cash value increases or decreases. In general, these policies offer more growth potential than whole life or other permanent insurance policies.
A variable universal life insurance (VUL) policy allows you to vary the premium you pay, and a portion of each payment is deposited into an account that is invested in various sub-accounts. These accounts can include equities, bonds and money market funds. You can also choose from a selection of optional features that you can add to your policy for additional charges. The fee structure for these policies is complex and varies from company to company. Some common fees include transaction charges, advisory services, underlying fund expenses and charges for optional benefits.
In addition to these policy-specific fees, variable life insurance investors are subject to investment gains and losses that can be greater than those of a traditional life insurance policy. You should carefully consider the investment objectives, strategies, risks, charges and expenses of any policy you are considering. You can find this information in the prospectus for the specific policy you are considering.
Variable life insurance policies are considered securities, and are not insured or guaranteed by the federal government. If the insurance company experiences financial problems that affect its ability to make payments, your variable life policy’s cash values may decline. In this case, the Securities Investor Protection Corporation (SIPC) may intervene and “make whole” your investment.
This type of policy is best suited for individuals who want to take on more investment risk than is offered by traditional tax-advantaged savings vehicles, such as IRAs and 401(k)s. They should have a long-term view of their financial goals and be comfortable managing the variable investment components of their policy. It is important to work with a financial professional and/or life insurance agent who understands this type of product thoroughly.
Universal Life
As its name suggests, universal life insurance is a type of permanent coverage that offers flexible premiums and a death benefit. This policy differs from other types of permanent policies in that it allows the policyholder to change the amount they pay into the policy within certain limits, while still building up cash value over time. This flexibility in the form of varying premium payments may be an attractive option to those who need the security of lifetime protection but have variable incomes.
The premiums paid into a universal life policy go toward the cost of insurance and administrative fees, while the remainder is added to the policy’s cash value. The cash value grows based on an interest rate set by the insurance company. Policyholders are also able to take out loans from their cash value in order to use for other expenses. However, taking out too many loans can deplete the policy’s cash value and cause it to lapse.
There are different types of universal life insurance, including indexed universal life, variable universal life, and guaranteed universal life. These variations offer different benefits and complexities. For instance, indexed universal life policies can offer higher earning potential than other universal life insurance policies through investments in market-based assets. Similarly, variable universal life insurance can provide the policyholder with greater flexibility in their premium payments, but it may require more oversight due to the underlying sub-accounts.
Some universal life policies come with riders that can add additional benefits to the policy. These can include an accelerated death benefit, which allows the beneficiary to receive a portion of the death benefit while the policyholder is alive if they are diagnosed with a terminal illness. There are also family riders, which can add additional coverage for spouses and children.
While the ability to adjust premium payments is an attractive feature of universal life insurance, it’s important to remember that any changes in your premium will have a long-term impact on your death benefit and your cash value. You should always consult a financial planner when considering these kinds of policies, and make sure that you understand the underlying risks before making any decisions.