Life Insurance Greenville provides peace of mind for the people you love. It can help cover funeral expenses, pay off debts, or replace lost income.
Life insurance policies typically cover natural and accidental death, as well as some that occur while you’re alive (such as a critical or chronic illness). Some may also offer living benefits.
Life insurance is a contract between an insurer and the insured (the policyholder). It provides a lump sum of money, a death benefit, to beneficiaries when the insured dies. The beneficiary can use the funds to cover funeral costs, debts, and mortgage payments. The amount of coverage you need depends on your needs, and several online tools are available to help you calculate it.
The death benefit is typically equal to the face value of the policy, although it can be higher or lower. The death benefit can also be used to pay a lump-sum tax-free income to beneficiaries. Other benefits of life insurance include a living benefit, which allows you to withdraw or borrow against the face value of the policy if you need cash. Some policies also provide additional coverage for accidental deaths or critical illness, which can increase the face value of your policy.
Typically, insurance companies will ask for a medical exam before issuing a policy. This is known as underwriting, and it helps the insurer evaluate the applicant’s health and medical history. It will also consider the amount of coverage you want, your age, and your risk factors such as family history or lifestyle.
Some types of life insurance do not require a medical exam, and they are often cheaper than traditional policies. These are called simplified or guaranteed issue life insurance, and they may be a good option for people with preexisting conditions who cannot qualify for traditional coverage. Some insurers offer these policies to groups, such as employees of a company or members of a union, or to individuals in pension or superannuation funds.
Premiums
The premiums paid by policyholders are a significant component of life insurance. They help cover costs like administrative fees and other charges associated with providing the death benefit to beneficiaries. They also provide a source of income for life insurers, which they can invest to generate higher returns.
The amount of premiums depends on a variety of factors, including the size of the death benefit and your age at the time of purchase. Younger people are typically viewed as lower risk, and so their premiums are often less expensive than those of older applicants. In addition, women usually live longer than men, nonsmokers are typically seen as low-risk applicants, and people without complex medical issues may get preferential pricing.
Other considerations include the policy’s coverage amount and whether it includes riders or other add-ons that could increase the death benefit or otherwise raise the policy’s cost. Your occupation and risky pastimes can also affect the cost of your premium, as certain professions and hobbies (such as skydiving or rock climbing) can make you a more high-risk applicant.
In addition to addressing the insured’s individual needs and risks, life insurance policies typically provide flexible options for premium payment periods. This can be important for people whose income ebbs and flows with business cycles, such as commission-based salespeople or ski resort owners. Moreover, whole life policies often allow you to stop paying premiums at any time by electing a reduced “paid-up” policy at that point. In addition, you can choose to pay your premiums on a monthly, quarterly, semi-annual, or annual basis, though the latter options typically incur an additional charge. In some cases, your premiums may be tax deductible.
Riders
There are a variety of riders available that can be added to life insurance policies. These are additional features that can be purchased to help create a policy that is more customized to the insured’s unique circumstances. Some of these are included automatically and free of charge, while others will add an extra premium to the policy. It is important to understand the specific wording of each rider in order to determine whether it is worth the cost or not.
Some of the most common riders include guaranteed insurability, return of premium, family income benefit, long term care, and accelerated death benefit. These are available with whole life and universal life insurance policies.
A return of premium rider allows you to get back the premiums paid into your policy if you are diagnosed with a terminal illness or can no longer work due to an accident or disability. This is typically only offered by a limited number of insurers, so make sure to read the fine print carefully.
Other riders are aimed at providing living benefits rather than just a death benefit. A terminal illness rider can be a valuable addition to any term life insurance policy, as it allows you to access some of your death benefit during the insured’s lifetime, which could be used to pay for care. Other riders include a waiver of premium rider, which will waive your life insurance premium if you develop a qualifying disability. This is only available from a small number of insurers, and the qualifications may be quite strict.
Other riders allow you to convert your term policy into a permanent policy without going through the full underwriting process, which can be beneficial if you need to secure a larger amount of coverage later in life. There are also riders that provide access to additional services, mobile applications, subscriptions and tools that can be used to manage health, financial or lifestyle needs.
Beneficiaries
A life insurance policy provides a death benefit that is paid out in the event of a policyholder’s death. The amount of this payment can be divided by percentage among multiple people and entities, known as beneficiaries. Beneficiaries can be named in the insurance contract application or added later. Often, this is done after major life events, such as the birth of a child or marriage.
It is important to think about who you want to be your life insurance beneficiary and to review your policy periodically. Beneficiaries can be anyone you choose, including family members, friends, charitable organizations and trusts. You can also name minor children as beneficiaries, though a legal custodian must be appointed to manage the payout until they are old enough to receive it themselves.
Most states and policies have rules about who you can name as a beneficiary. Typically, you will have to provide some kind of documentation or signature that proves you are legally capable of making this choice and that it is your desire to do so. It is important to check with your insurer about the specific requirements in your state and for your particular policy.
It is also important to remember that once you have designated someone as a beneficiary, this cannot be changed. This means that if you decide you would like to change who is receiving the payout, it may take some time before this change takes effect. It is best to discuss your choice of beneficiaries with family members so they are aware and can provide the necessary documents, if needed. This will help to avoid confusion and speed up the process of locating the death benefits.
Policy term
The policy term is the duration of coverage for which a life insurance policy is active. It is determined at the time of purchase, and it is important to choose a policy that matches your family’s needs. The policy term can also affect how much the insurance costs. Typically, the longer the policy term, the higher the premium.
Many life insurance policies offer the option to renew on a year-by-year basis after the initial term expires. This feature can be valuable if you develop serious health issues that make it difficult to get new coverage or if you want to keep your existing coverage. However, the premiums for renewed policies typically increase each year to reflect age-related risk increases.
In contrast, permanent life insurance offers lifetime coverage, regardless of changes in your health. This type of policy is based on the assumption that you will live for as long as you pay your premiums, and some policies even contain a savings component that builds up over time. This savings element, known as cash value, differs from company to company. Generally, it is determined by using the Commissioners 1980 Standard Ordinary Mortality Table.
The death benefit, or face value, of a life insurance policy is the amount of money that your beneficiaries will receive if you die during the policy period. This sum can be used to settle medical and funeral expenses, consumer debt, mortgage debt, and other outstanding obligations. The death benefit is generally tax-free for the beneficiaries of your choice.
Some term policies include a conversion rider that allows you to change your policy into a permanent life insurance plan without having to undergo additional underwriting. This can be useful if you develop a health condition that prevents you from getting a new policy or if your term policy ends before you are ready to retire.