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South Carolina Life Insurance: Life Insurance Settlement Options

 

As you are considering various South Carolina life insurance policies one item that can sometimes get overlooked is how the death benefit is to be paid out. You may not think you have many settlement options for the death benefit, but, in fact, there many options.

Here are some of the most popular options you have when it comes time to disperse the death benefit of your South Carolina life insurance policy.

 

South Carolina Life Insurance Settlement: Lump Sum Option

The most common and probably the only option you thought was available is the lump sum option. The death benefit is paid out to the beneficiary in one lump sum at the time of the settlement. It is the most straightforward settlement option and provides the beneficiary immediate funds to pay off debts and burial expenses. However, it may not be the ideal option if the need for funds reaches far into the future.

The lump sum option is your best bet if your South Carolina life insurance policy is used to protect your business. If the goal of the insurance is to provide funds for a buy/sell agreement, then the lump sum option will give the large amount of funds necessary for the transaction.  

 

South Carolina Life Insurance Settlement: Life Income Option

The life income option is another common method of settlement. It provides your spouse and/or children with a steady income. This is best used if you have no large outstanding debts and you want to provide your family with steady income. When choosing this option, it is important to understand just how much it will take your spouse and children to live upon comfortably and set the installment amount at that figure. Also, make sure the settlement amount is earning interest during the payout process.

 

South Carolina Life Insurance Settlement: Last Survivor Option

This is an option where two or more people are named a beneficiary of a life insurance policy. Each person will receive a life income type settlement (regular payments) and the payments will continue for each until the last survivor passes away. This is used many times when a husband and wife are named beneficiaries of one policy and each receive a payment. When one spouse dies, the other continues to receive payment until his or her death.

 

South Carolina Life Insurance Settlement: Fixed Period/Amount Income Option

This is a form of the life income option. It allows for a payment to be made to the beneficiary in a fixed manner with two options. First, the lump sum payment of the policy may be made over a fixed period. If you want the lump sum to be paid in regular installments over, say, a 10 year period, then you would choose the fixed period income option.

If, however, you would like a specific amount to be paid in installments until the lump sum payment is exhausted, then you would choose the fixed amount income option. The big advantage of either of these two options is that the lump sum is always earning interest and you get more money than if you had simply taken the lump sum payment.

 

South Carolina Life Insurance Settlement: Interest Income Option

If your beneficiary is in pretty solid financial footing, then this may be a good option to consider. The interest income option is most beneficial to beneficiaries that are seniors or retired. It allows the beneficiary to have a yearly payment based upon the interest earned on the policy, but the principle balance of the death benefit is untouched.

The interest on a large policy of 1 million or more dollars can equal a healthy salary for one person. If your beneficiary doesn't have extraordinary needs, this is a good way to provide for him or her but leave the policy intact to hand down.

 

Get South Carolina Life Insurance Quotes on the Policy You Need

Regardless of the settlement option you choose, you don’t want to purchase a life insurance policy without getting more than one life insurance quote. You can use South Carolina life insurance quotes to help you decide which type of policy is the most cost-effective, then you can use them to decide which company can offer you the best rate on the South Carolina life insurance policy you need to properly protect your family.

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