While death is something no one likes to think about, it’s something everyone should prepare for. By purchasing a life insurance policy, you can help care for your loved ones financially, even after your passing. Without your income, family members may struggle with mortgage payments and bills, saving for retirement, or paying for childcare. With life insurance, the insurance company pays a lump sum to the named policy beneficiaries upon your passing. This money can help your loved ones replace your lost income and maintain the lifestyle they enjoyed prior to your death.
Term vs Whole Life Insurance
Life insurance companies sell two primary types of life insurance policies: term life and whole life. While structured differently, both types of policies pay a lump sum of money to beneficiaries upon your death. Here’s a bit more about how each of these types of policies works:
Term Life Insurance
With a term life policy, you pay monthly premiums for insurance coverage over a set term, typically 10, 20, or 30 years. If you die during the policy term, your beneficiaries receive a lump sum payout from the policy. These are the characteristics of a term insurance policy:
- Provides coverage for a set term (expires)
- Lower monthly premiums
- Variable premiums (may increase over time)
- Easier to understand
- No cash value
- Lump sum payout (death benefit) at time of death
Whole Life Insurance
A type of permanent life insurance, a whole life policy never expires if you continue paying the monthly premiums. Unlike a term policy, a whole life policy builds value over time, which means you can borrow against the policy or surrender the policy for a cash payout. Either of these events terminates the policy. As long as you continue paying premiums, beneficiaries receive a set death benefit upon your passing. These are the characteristics of a whole life insurance policy:
- Never expires (no set term)
- Higher monthly premiums
- Set premiums (never increase)
- Freedom to take loans against the policy or surrender for cash value
- Tax-deferred earnings at a guaranteed rate
- Guaranteed death benefit
- Might pay annual dividends
Top Life Insurance Companies in Greenville SC
Many of the nation’s top insurance carriers sell life insurance policies in Greenville, SC. According to data published by the South Carolina Department of Insurance, these ten companies sell the most life insurance policies (by premium volume):
- Northwestern Mutual Life Insurance Co – 5.29%
- New York Life Ins Co – 4.57%
- Minnesota Life Insurance Company – 4.45%
- Metropolitan Life Insurance Company – 4.20%
- Lincoln National Life Ins Co – 4.07%
- State Farm Life Ins Co – 3.72%
- Massachusetts Mutual Life Insurance Company – 2.99%
- Prudential Ins Co of America – 2.98%
- Pruco Life Ins Co – 2.19%
- American General Life Insurance Company – 2.00%
Source: South Carolina Department of Insurance (http://doi.sc.gov/DocumentCenter/View/10204)
Life Insurance Greenville SC
Term life and whole life policies are both great options for providing for your family in the event of your death. To determine what type of policy best suits your needs, discuss policies with a licensed South Carolina insurance agent. Give us a call or fill out the form below, and we’ll have a licensed agent get in touch with you to discuss your life insurance options. We pull quotes from the top insurers in South Carolina, ensuring that you get the coverage you need at the best rates possible.
Life Insurance Frequently Asked Questions
How much life insurance do I need?
When selecting the death benefit of your policy, consider how much money your loved ones will need to maintain their current lifestyle. You should consider the burden of the following expenses:
- House mortgage or rent payment
- Basic living costs
- Outstanding debts or personal loans
- Cost of childcare
- College tuition or other school tuitions
- Funeral expenses
- Retirement savings
Should I purchase life insurance through my job?
Most employers do offer term life insurance benefits to employees for a nominal premium. However, many of these policies are not portable, which means if you leave your job your policy is terminated. Before signing up for life insurance benefits through your employer, ask whether the policies offered are portable. It may be worthwhile to at least shop around for other policies outside of the workplace.
Are life insurance death benefits taxed?
Death benefits are non-taxable to your beneficiaries. With a permanent life insurance policy, policy loans and withdrawals are not taxable, and the cash value of the policy increases on a deferred-tax basis.
How much are life insurance premiums?
Insurance companies determine life insurance premiums based on several factors, including:
- Your overall health
- Whether you smoke
- Gender, height, weight, and age
- Your involvement in risky activities