Types of Life Insurance

Many people purchase life insurance to provide a death benefit for their loved ones. This payment can help cover financial expenses, debt, and funeral costs. It can also help replace lost income. Beneficiaries can be family members or non-family members.

You can add riders to your policy to customize it for your needs. These include riders that can prevent premiums from increasing, cover disability, and fund retirement. Contact Life Insurance Anderson SC now!

Term life insurance is a simple way to provide coverage for your family in the event of your death. It usually pays a set amount of money to your beneficiaries when you die, but it only lasts for a fixed period of time, such as 10, 20, or 30 years. You can choose the length of the term, and it will generally depend on why you need life insurance — if you want to make sure that your debts can be paid off, a 10-year policy might be enough; if you want to ensure that your children can attend college, a 30-year term might be better.

If you need coverage for a longer duration, you may be able to buy additional term policies or renew your existing one. If you choose to renew your policy, the premium will be based on your age and health condition at that time, so it may be higher than what you originally paid. Some term life policies also include an accelerated terminal illness rider, which will allow you to receive a portion of the policy’s death benefit early.

Whole life insurance, on the other hand, provides coverage that lasts your entire lifetime as long as you pay your premiums. It also builds a cash value, which you can borrow against or use for supplemental retirement savings. However, this type of life insurance is typically more expensive than term life.

You can get either type of life insurance through a licensed financial professional, who will listen to your needs and guide you to a coverage solution that is within your budget. You can find a life insurance agent through an online search or by calling a local agency.

It’s important to explore your options for life insurance before making a decision. The more informed you are about the different types of coverage available, the easier it will be to make a choice that works best for your situation. You can also talk with a life insurance specialist at Guardian, who will connect you with a knowledgeable person to help you understand your options.

Whole life

A whole life insurance policy gives your family a guaranteed death benefit. It also builds cash value that you can access at any time during the policy’s life. You can use this money for many things, such as college expenses, income in retirement or a legacy for your children. In addition, whole life policies can help offset the loss of a key employee or partner in a business.

You can choose from several options when purchasing a whole life insurance policy, including the level payment option, which ensures your premiums won’t increase over the life of the contract. You can also choose a limited payment option, which allows you to stop paying premiums after a fixed period of time. You can also add a paid-up additions rider to your whole life policy to help you reach your financial goals sooner.

Unlike term life insurance, whole life insurance provides coverage for your entire lifetime. It is an excellent choice for those who want to leave behind a guaranteed death benefit for their loved ones and create a permanent savings vehicle for their future. It also has the potential to generate substantial dividends that can be used to reduce the cost of premiums.

While whole life insurance policies offer many benefits, they can be more expensive than other types of life insurance. Thrivent’s experienced financial advisors can help you evaluate your needs and select the type of life insurance that is best for you.

When choosing a whole life policy, you should consider the financial stability of the insurer. Generally, the more financially stable the company is, the better. This is especially true for companies with a long history of operating successfully. Thrivent’s recommended companies have received high marks from independent ratings agencies like AM Best and Fitch.

Whole and universal life insurance are both excellent choices for those who want lifetime protection. Both have a guaranteed death benefit and build cash value, but there are important differences between them. For example, whole life offers a steady death benefit and cash values that grow at a guaranteed rate, while universal life has more flexibility.

Universal life

Unlike whole life insurance, universal policies allow you to change your premium and death benefit amounts as needed. You can also add a rider to your policy to increase the payout in the event of an accidental death or terminal illness. However, these additional riders usually come with a higher price tag.

Some of the most popular types of universal life insurance include variable UL and indexed universal life. Both offer flexibility in the form of a flexible premium and the potential to earn interest from an underlying sub-account. However, a variable UL policy requires more oversight because the underlying investment choices can have an impact on and detract from the cash value balance.

A indexed universal life (IUL) policy has the advantage of higher returns than traditional universal life insurance. This is because it is based on the performance of an index such as the S&P 500, Dow Jones or Nasdaq. In addition, an IUL policy can include a living benefits rider that pays a portion of the death benefit if you are diagnosed with a critical or chronic illness.

When choosing a universal life insurance policy, you need to consider your current and future financial needs. You can find the amount of coverage you need by calculating your salary, mortgage and funeral costs. Generally, experts recommend buying enough coverage to cover five to 10 times your annual salary.

Another important consideration is the amount of money you can earn on your cash value account over time. If you withdraw money or take out a policy loan, this will reduce the amount of the death benefit your family will receive when you die. This can even cause the policy to lapse, so you should consult with a financial professional before making any changes.

You should also choose a company that offers the best universal life insurance rates. Look for a company with an excellent credit rating, length of history and consumer reviews. In addition, you can also compare prices from several different insurers to find the best deal. It’s also helpful to have a life insurance calculator handy so that you can figure out how much coverage you need.

Variable life

A variable life insurance policy is a type of permanent life insurance with an investment component. It allows the policyholder to choose a variety of investments for their cash value account, and the death benefit is directly tied to how those investments perform. This means that a policyholder may earn more than with other types of permanent life insurance, such as whole or universal life policies. However, this comes with a greater degree of risk. In the case of a poor market, a variable life policy’s investments could fall significantly. This can lead to a lower death benefit, or even cause the policy to lapse.

Like whole life and universal life policies, a variable life insurance policy has a separate cash value account that can be invested. It also offers flexibility with premium remittance, as the policyholder can pay higher or lower premiums depending on their needs and investment goals.

The unique feature of this type of life insurance is that the cash component can be invested in asset options, mainly mutual funds. These can increase the death benefit, if they perform well. However, the value of these assets is subject to a variety of factors, including: the premium paid, the cost of the investment option, and the underlying fund fees and expenses.

In addition to the potential for investment growth, a variable life insurance policy has tax advantages. The IRS doesn’t count the death benefit as gross income, which can save beneficiaries from having to pay taxes on it. The policy also grows on a tax-deferred basis, which can provide savings for the beneficiaries of the insured individual.

Another advantage of a variable life insurance policy is that it provides a level of protection for the heirs of the insured person. This is because the death benefit is tied to the performance of the separate accounts, which can help provide financial protection in the event of a negative aggregate performance.

Like other types of permanent life insurance, a variable universal life policy can offer coverage for the entire lifetime of the insured individual. It can also provide a cash component that can be used for other purposes, such as paying for college tuition or to cover debts. The amount of money that can be borrowed from the cash account is typically limited, and any unused balance will be deducted from the death benefit.